Michigan Insurance Coalition responds to Representative Banks proposals to change no-fault

The following can be attributed to Tom Shields, spokesperson for the Michigan Insurance Coalition (MIC):

We appreciate Rep. Banks’ acknowledgement that something must be done to reform no-fault insurance in Michigan. First, the Michigan Insurance Coalition should emphasize that it is not seeking a tax credit for our industry. The only way to make sure Detroit drivers are not paying among the highest rates in America is to reduce cost in the system.

Rep. Banks’ legislation, as introduced, does nothing to reduce the costs of providing no-fault insurance to Michigan drivers. In fact, the bills actually lock in the Chargemaster rate currently used by medical providers to gouge auto accident patients by charging three to five times more than other patients covered by traditional health insurance. Instead of dealing with the issue directly, the proposed legislation also appears to shift the costs to the taxpayers at a cost up to $500 million per year.

Even CPAN says in their statement, “Michigan has been in need of comprehensive no-fault reform that reduces medical costs to insurers…” We agree. The only way to reduce medical costs is to institute real cost controls. In the past, MIC has supported reasonable pricing reforms that would reimburse medical providers:

  • At 150 percent of Medicare
  • At the same rate as Workers Compensation Insurance pays
  • At the same rate that the average commercial insurer like Blue Cross/Blue Shield pays

Any of these fair and reasonable reforms would result in short-term and long-term savings to Michigan drivers and make Michigan’s no-fault system more affordable to divers across the state.

MIC remains committed to reforming auto insurance in Michigan to reduce costs to drivers while still protecting the most generous benefits in America. But until lawmakers stop medical providers from overcharging auto accident patients just because they can, consumers will pay the price through disproportionately high auto insurance rates.