On April 23rd, 2015, The House Insurance Committee passed a revised version of Senate Bill 248 with a vote of 9-6. This bill spent a very short amount of time senate and house. It will most likely be voted on the floor this very week. Why the big hurry? They are also adding a provision to this bill that makes it so that we can never vote on it even though we are the ones who created it and upheld it twice in state votes.
Insurance Companies Boost Profits, Michigan Residents Still Pay Highest Rate in US
The committee had a real chance of lowering the rates for Michigan residents which currently pay the highest auto insurance rates in the U.S. by a large margin. Republican representatives shot down more than a dozen proposed amendments that would have made a positive impact for the consumers. They were denied without hesitation. Instead, they decided to allow two items that will clearly boost their own profits while doing very little to make auto insurance rates more affordable. In fact, the insurance companies will reduce their costs by over 50%, while Michigan residents get a one time reduction of $100. They claim that this bill will lower rates significantly and make rates more affordable, but that is certainly not the case and just a coverup for their own agenda.
What Are The Attendant Care Restrictions?
Now, auto insurance companies are able to restrict attendant care payments which is a vital part of the rehabilitation process for auto accident victims. They will only be responsible to reimburse $15/hour “regardless of the level of care provided.” This rate doesn’t apply if “the family or household member [who is providing the in-home attendant care] is licensed or otherwise authorized to render the attendant care under … the Public Health Code, or is employed by, under contract with, or in any way connected with an individual or agency who is licensed or authorized to render the care.”
What Are The Price Controls on Medical Providers and Hospitals?
They were also given the ability to place price controls on what medical providers and doctors can charge when treating victims of a Michigan auto accident. Instead of a doctor making the decisions of what a car accident victim needs, the decision will be in the hands of an insurance adjuster. So even though your car insurance payments will be the same, your benefits will be drastically cut if you are injured in an auto accident. Sounds fair right? According to the bill doctors may only charge a “reasonable amount” and that it shall not exceed 150% of the amount Medicare would pay.
So What Savings Does The Consumer Get In Exchange?
As an exchange for these two profit boosting provisions, they give us a one time fee reduction of a whopping $100. This is the reason the house insurance committee claims they are making insurance “more affordable”. They can also once again start increasing insurance prices starting on June 30, 2018. Doesn’t seem like Michigan residents are getting the good end of this deal. We will still have the highest auto insurance rates in the country by approximately $500 per year. Our average car insurance premium is $2,476 per year.
The Bottom Line
This bill is clearly deceptive and aimed to increase profits for the auto insurance companies. They had a real chance to make a positive impact for consumers and they shot down all of those provisions without hesitation. They are using the claim of “making insurance more affordable” to coverup the fact that bill reduces their costs and boost their profits significantly. They are banking on the fact that we are too stupid to realize what is actually going on, and they want us to believe that they are hurting financially because of no-fault law. When’s the last time you saw an auto insurance struggling financially?