Michigan House Committee Would Mandate $100 Rollback On Auto Insurance

Republicans, Rep. Michael Webber of Rochester Hills and Rep. Jim

Runestad, of White Lake Township, abstained.

Changes in a substitute included a specific fee schedule with a

reimbursement rate at 150 percent of the Medicare rate and a requirement

for auto insurers to reduce rates by $100 per vehicle in the first two

years. Immediately hospitals and other supporters of the current system

denounced the fee schedule as unworkable and financially ruinous.

Rep. Tom Leonard III (R-DeWitt), chair of the committee, called the

changes in the SB 248 a step in the right direction. Leonard said he is

willing to work with anybody interested in the issue moving forward.

anybody who wants to be a part of the solution on this,” he said. “I am

going to be on the phone a lot over the weekend.”

Rep. Tom Barrett (R-Potterville), sponsor of the substitute, said

although the rate rollback is only guaranteed for two years, an increase

in competition is expected after those first two years, which will lead

to better rates.

statement that the group is disappointed in the bill the House committee

reported. “The fee schedule in this bill is completely unworkable from a health

care provider standpoint,” he said. “Without question, the reimbursement

structure of SB 248 will cost hospitals tens of millions dollars each.

This is not a scare tactic. If SB 248 passes as is, trauma centers will

be threatened in every area of the state. From that standpoint alone,

this bill is irresponsible.”

group is encouraged to see the House acting with conviction on getting

the bill to Governor Rick Snyder. “We’re pleased that the House is moving forward and looking for

solutions of high prices of no fault without reducing benefits,” he

said.

worker’s compensation (as the Senate committee originally proposed but

then revised), but he expects more changes to be made to the bill before

it is passed. On the rate rollback, Shields said insurers can’t predict

what conditions would be like in the future, but the coalition is still

encouraged by the Legislature having the discussion.

substitute, but most failed. One amendment offered by Rep. Tom Cochran

(D-Mason), minority vice chair of the committee, would have removed the

$15 per hour limit on attendant care provided by family members.

He also offered a series of amendments that would require rate rollbacks of 10, 20, 30 and 40 percent, all of which failed.

Later Cochran blasted the bill in a statement, saying he is disappointed

at the speed the bill is moving through the Legislature.

reduce pay for medical professionals and ultimately leave victims of

catastrophic accidents with fewer options and higher bills,” Cochran

said. “The proposal, which is supposed to reduce the cost of insurance,

does not even provide guaranteed rate savings for consumers. Quite

simply, these bills are bad policy, and my Democratic colleagues and I

will fight them every step of the way.”

care limits would not apply to family members who received training and

were professional home health caregivers.

Leonard said the amendments offered by Democrats came late and were not

able to be fully vetted, though similar amendments could end up in the

final bill.

anybody on any amendment,” he said. “Most of the amendments offered

today were not able to be properly vetted. … Many of the amendments

voted on today, they very well could be amendments offered on the floor,

but we need time to vet all of those.”

failed, would have removed the $150,000 appropriation in the bill.

Opponents have charged the appropriation is there only to make the law

referendum-proof.

Asked if the appropriation was needed, Leonard said the provisions in

the bill need to be implemented and it is needed. When asked why the

appropriation couldn’t be inserted into the budget, which hasn’t been

finalized by the Legislature, Leonard said: “That will certainly be

discussed.”

levels and ZIP codes as ways for auto insurers to set a person’s rates

also failed.

Otherwise, the bills phase out the Michigan Catastrophic Claims

Association, replacing it with a new agency under state oversight, and

establish a fraud authority partially funded by insurers.

CPAN also blasted the fraud portion of SB 248, saying it only considers fraud perpetuated by claimants.

companies are denying care for injured people based on falsified

information and fraudulent practices,” Cornack said. “That is just as

fraudulent as someone who files a false claim, yet this committee chose

to do nothing.”

the no-fault legislation was originally passed, it was to ensure those

who are catastrophically injured received proper care. He urged the

committee to take more time to review the legislation before acting.

But Wendy Block with the Michigan Chamber of Commerce said the bills

would attract new companies to write insurance in the state, and that

would lead to even lower rates with more competition.

In a statement, the Michigan Health and Hospital Association said the bill would be devastating.

Bill 248 which would slash hospital reimbursement and eliminate

guaranteed benefits for accident victims, while providing no permanent,

guaranteed reductions in auto insurance premiums for drivers,” the group

said. “This threatens hospitals’ ability to sustain current levels of

service and endangers access to care for ALL patients, not just auto

accident victims.”

Sen. Joe Hune (R-Whitmore Lake), sponsor of the bill, said they will

discuss some of the changes the House committee made in the coming days. “I’m supportive of getting it accomplished and getting it across the

finish line,” Hune said, adding that there may be another caucus

discussion needed on the changes.

Meekhof agreed, saying he will be talking with caucus members. But he is

unsure on the specific fee schedule rather than the more generic one

the full Senate adopted because his caucus supports market-driven

results generally. “People have to compete or bargain for (those reimbursements),” he said. “The market would have to make those decisions.”

As to the rate rollback, Meekhof said that wasn’t something the caucus started out thinking about much at all.

look at it in the same light as (the House) did on that item.”

As to how soon caucus discussions might begin, Meekhof said he and Hune

would like the House to finish their work first, including passage on

the House floor.