Michigan SB 248, which would “reform” the no-fault insurance system, will likely be debated and voted on in the House this week.
Update, 4/30/15: We have launched a new page dedicated to the current no-fault reform efforts surrounding SB 248. We will keep that page updated as the bill progresses.
Quite a bit has happened since the Michigan Senate contemplated and ultimately passed SB 248, a piece of legislation which (as it currently stands) would devastate the Michigan no-fault insurance system. Our no-fault attorneys have been working tirelessly to educate the public about the consequences of passing such a bill, from speaking to the media to testifying before lawmakers in order to help them understand the bill’s implications. We have covered it rather extensively on our Auto No-Fault Law blog, but as it’s likely that the House will debate and vote on the bill this week, it is worth recapping everything that has happened thus far.
SB 248 in the Senate
After the No Fault Reform Bill was introduced in the Senate, it was referred to the Senate Insurance Committee. In less than 72 hours, a substitute bill was adopted (a bill that not even all of the legislators had a chance to review), was voted out of committee, and was subsequently passed by the Senate by a 21-17 vote. At that point, it was sent to the House.
SB 248 in the House
After it was introduced in the house, Michigan SB 248 was referred to the House Insurance Committee. The committee then heard testimony both in support and opposing SB 248. In three days, the legislators who comprised the committee heard nine hours of testimony, which included poignant stories from auto accident victims, their family members, their medical providers, and legal experts and advocates who could communicate just how devastating the bill would be, if passed. Despite hearing those stories and the valid concerns raised about the bill, lawmakers ultimately voted SB 248 out of the House Insurance Committee along party lines.
However, after hearing the last of the testimony and before the final vote, a substitute house bill (H-2) was offered and adopted. Among the changes provided for under the substitute house bill included:
- capping medical provider reimbursement rates at up to 150% of what would be charged under Medicare; and
- a temporary premium reduction of $100 for two years after the legislation would go into effect.
Before the final committee vote on the substitute bill, Democratic members of the committee offered up a number of amendments to attempt to address the concerns many had with SB 248. Only one amendment relating to attendant care was approved. The legislation now provides that payment for family members providing attendant care is capped at $15/hour, unless a family or household member is licensed or otherwise authorized to provide attendant care. Those individuals would not be subject to the maximum $15/hour rate.
The House Substitute to SB 248 still does nothing to address the one-sided “fraud authority” it creates. The Committee heard stories of real people being affected by the abusive, fraudulent behavior perpetrated by insurance companies against consumers, and yet chose to do nothing.
The bill provides temporary rate relief – who is to say that insurance companies won’t increase premiums after the two year period?
Nothing was done to address the issues surrounding what would happen with the current MCCA, including what happens to the $17-$18 billion it has in reserves.
The attendant care provisions in SB 248 are still a problem – there is still the arbitrary $15/hour cap (now subject to the exemption described above).
The reimbursement provision is still problematic – charging only up to 150% of Medicare rates would still jeopardize medical providers’ ability to continue to provide the high-quality care auto accident survivors need, especially those facing recovery from severe, catastrophic injuries.
Finally, Michigan SB 248 still contains the $150,000 appropriation, which means that the people of Michigan cannot vote on the matter – it’s referendum-proof.
What happens next?
At this point, the House must debate and vote on their version of SB 248. It is possible that amendments will be introduced that truly address the concerns that so many have with the language of SB 248. Until that happens, continue to contact your representatives and let them know how unworkable the bill still is. If you or a loved one have suffered severe, catastrophic injury as a result of an auto accident, share your story.
A change to the no-fault system on so large a scale must not be rushed through, as it has been. It must be done carefully and thoughtfully, and with serious consideration of all interested parties’ ideas and concerns. That has not happened here.
They can push through legislation to wipe out a safety net for people that are hurt and unable to take care of themselves in less than a week??
All for saving us $50 a year on car insurance??
Most be a lot of lobbying money behind it if they also want it set up so the voters cannot override it????
Plus, not one word on the current fund being protect from the Governor getting his hands on it and passing it out in another tax break to big business??
Great to see how concerned our legislators are about the people they represent
My daughter is currently in the MCCA system. I see that the new MCCC (if passed) will be funded at a rate of $150 per vehicle, but I do not see how the current MCCA system is funded going forward. Am I missing something?
Thanks for visiting our blog. It is our understanding that the MCCA would not receive any additional funding if the new MCCC comes into existence (in SB 248’s current form). The MCCA will remain in existence with the funding it currently has (between $18 – $20 billion), and will continue paying out claims with that money.
Please feel free to contact us if you have any additional questions or concerns.
How can they take our right to vote on this away from us?
What happens to us when the current MCCA fund is empty who will pay our bills. I am one of those people this fund was set up to protect.
According to my former insurance they have paid out some $407,000.00 on my claim since 2002. I have additional surgeries need on my back, and I am having trouble getting them to pay for my last operation on my shoulder. With these changes it seems the lawmakers a giving the insurance companies other avenues to mistreat us when we need them to pay a claim.
Thanks to SDLF for all the GREAT advocacy over the years. I’ve had the honor to meet and talk to George at past BIA conferences.
Just wondering: would SB248 open the books of MCCA for public inspection and audit. And, on average, what percentage of a typical premium is for MCCA assessment.
My wife is beneficiary of MCCA and if it weren’t for MCCA and for SDLF, my wife would have died in a nursing home years ago. But the attendant care benefit allows me to care for her at home where she belongs!
SDLF: keep up the great work – I sincerely feel you guys are a blessing from God! You have no idea how much your advocacy is appreciated by thousands of Michigan citizens
Thank you for your kind words! It has been our pleasure to advocate and fight for the people of Michigan.
To address your questions, SB 248 in its current form does not open the MCCA’s books or provide for any sort of transparency. That issue is currently being litigated and is before the Michigan Supreme Court: http://www.cpan.us/news_manager.php?page=15663.
The percentage of the premium that the MCCA comprises will largely vary from person to person. The MCCA per-vehicle assessment for the upcoming year is $150. We actually discussed the breakdown of auto insurance costs in one of our blogs: https://sinasdramis.com/cost-of-no-fault-insurance-in-michigan-sb-248-debate.
Also, you may want to share your story with your legislators and/or CPAN if you haven’t done so already – these are the stories of real individuals who have truly benefited from our no-fault system that our lawmakers need to hear as they consider SB 248.
Please feel free to contact us if you have any questions or concerns.
Thanks again for visiting our blog!