Back in 2019, Michigan’s no-fault insurance law underwent some changes that impacted people catastrophically injured in car crashes.
The changes left victims in fear for their health and their lives. That’s because providers who treat people with brain and spinal cord injuries had their reimbursement rates cut so drastically that many could no longer afford to provide care. They were driven out of business. Now, four years later, there is some slow progress in increasing reimbursements with a couple of bills working their way through the Michigan legislature.
Attorney Brandon Hewitt joined us from Michigan Auto Law to explain what’s happening and why we should all care about it.
Hewitt shared a statement recently released by Michigan Auto Law:
“This legislation is a step in the right direction. But it is long, long overdue. There is no excuse for why it has taken the Legislature four long years to fix a fee schedule that has jeopardized the health and lives of thousands of catastrophically injured car accident victims. We also witnessed the insurance companies knowingly misapply this fee schedule to boost their already high profits by slashing medical benefits and attendant care for four years, denying essential medical care to victims, while the DIFS Director Anita Fox stood by and did nothing. It took the Michigan Supreme Court to finally put an end to this madness. I welcome this legislation and I sincerely hope it becomes law. The tragedy is that its provisions and good intentions will come too late to help people like Brian Woodward and the many others whose lives have been irrevocably altered by the No-Fault changes that took effect in June 2019.”
Brian Woodward was catastrophically injured in a 1983 crash and was rendered quadriplegic. No-Fault benefits allowed him to create a life, live relatively independently and work. The No-Fault changes in 2019 took that all away. His case, life and death were covered extensively in the media.
Of course, the question is raised: Will these amendments to the No-Fault fee schedule increase premiums for drivers?
Hewitt said that is a hollow scare tactic to get people to act against their better interest and in the insurance companies’ best financial interest. He explained that insurers said the 2019 No-Fault changes were going to allow drivers to pay less for Michigan auto insurance – yet we still pay among the highest rates in the country.
“This latest scare tactic by the insurance industry highlights its deceitfulness when they were trying to sell the No-Fault changes in 2019,” said Hewitt. “Then, they argued that the No-Fault changes would allow PIP choice so people could choose their level of No-Fault medical (rather than being required to purchase unlimited as they since 1973) and thus they would ‘save,’ i.e., pay less for less coverage (not pay less for same coverage which is what savings would truly be). Back then, there was never even mention about the fee schedule being the key to paying less because they knew the public would never go for it because the public would rightly expect that a fee schedule would give them less to spend on medical care and, thus, would interfere with their access to and receipt of life-saving medical care.”
Hewitt says there are some ways to truly lower premiums for drivers. He suggests giving the Insurance Commissioner the power to stop insurers from charging “excessive” prices – a power that insurance commissioner have in other states.
“For starters,” Hewitt said, “this would involve amending the excessive rates statute to eliminate the provision that auto insurance rates can only be deemed ‘excessive’ if a ‘reasonable degree of competition does not exist’ in Michigan’s auto insurance marketplace.” Hewitt is following the bills through the legislative process and will bring us updates as they occur.
This story is sponsored by Michigan Auto Law.
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