Opinion | This is no time to second-guess Michigan auto insurance reform
A recent column in Bridge Magazine paints legislation recently introduced in Lansing as a “narrow and technical fix” to Michigan’s new auto no-fault law. We see a flashing yellow light and are urging caution.
Related: Opinion: Tweak no-fault reform to help seriously inured Michiganders
Drivers across Michigan are saving hundreds and even thousands of dollars a year on their car insurance premiums because of the new law. Businesses large and small are saving money too and more auto insurance companies have indicated they will start offering coverage to Michigan drivers as the law takes effect. This increased competition that will only serve to further drive down premiums.
The so-called technical fixes in these bills will slam the brakes on this progress and throw Michigan’s historic auto no-fault reforms into reverse. Premiums will go up for drivers and businesses. Companies planning to enter the market this summer will change course.
Passed with the goal of driving down Michigan’s highest-in-the-nation auto insurance premiums, the implementation of bipartisan reforms to Michigan’s auto insurance law was one of the few bright spots in 2020. The law made comprehensive changes to the statute, some of which have not yet gone into effect.
Legislation introduced last month seeks to backtrack on a key reform slated to go into effect on July 2, 2021, primarily by reversing course on the law’s medical fee schedule for certain medical providers.
The medical fee schedule was intended to rein in egregious overcharging by certain medical providers for procedures – something many have been doing for decades.
Lawmakers should resist the urge to make this seemingly innocent change. Although billed as a “technical fix,” it would throw the recently updated law into turmoil and create economic uncertainty for Michiganders at a time when they can least afford it.
Expected savings from the medical fee schedule are credited with lowering auto insurance rates for drivers and in the Michigan Catastrophic Claims Association’s (MCCA) decision to lower its per-vehicle fee by 60 percent over the last two years. Beginning this summer, drivers who choose unlimited, lifetime medical benefits will pay an MCCA assessment of $86, which is down from $220 in 2019. Drivers who choose other levels of Personal Injury Protection (PIP) won’t pay anything.
The changes to Michigan’s broken, outdated auto insurance system have been an across-the-board win for businesses large and small across the state – and their employees.
The Legislature should allow the law to fully take effect, so families can take advantage of the savings it brings and enjoy some degree of economic certainty at a time when they need it most.
Now is not the time for second-guessing.
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