Gov. Whitmer, Republicans see path to deal on Michigan auto insurance reform

Republican lawmakers say they want to lower drivers’ auto insurance rates, in part, by allowing them to opt out of Michigan’s unique-in-the-nation requirement that they buy unlimited lifetime personal injury coverage. House Republicans added provisions they said were sought by Democrats to prohibit the use of non-driving factors in setting rates and to guarantee lower personal injury premiums, though many Democrats said the language doesn’t go far enough.

May 24, 2019: Bipartisan Michigan auto insurance deal reached between Whitmer, GOP

Gov. Gretchen Whitmer said Tuesday she and Republican legislative leaders are no closer to a deal on no-fault auto insurance reform than they were last week, when the House and Senate approved bills allowing drivers to opt out of Michigan’s mandatory unlimited medical benefits.

But Whitmer, a Democrat, said she believes there is a path to compromise — albeit an uncertain one, adding that it remains too early to say what an agreement might look like.

“We’re talking,” she told reporters Tuesday after speaking at an infrastructure summit in Lansing. “I said I’m going to veto the bills that they passed. They’re not sending them to me yet. So the fact that there is a conversation at the staff level proceeding, I think, should give everyone the sense that there’s potential.”

House and Senate legislative leaders have not committed to taking action on no-fault auto insurance reform yet this week as they and their policy staffers work with Whitmer and her administration on a potential compromise, though legislative action on long-sought changes to Michigan’s sky-high auto insurance rates remains possible.

Amber McCann, a spokeswoman for Senate Majority Leader Mike Shirkey, R-Clarklake, on Tuesday described the timeline as fluid.

Whitmer met this week with Shirkey and House Speaker Lee Chatfield, R-Levering, to discuss the no-fault bills. Representatives for both legislative leaders described the talks as productive, though they would not divulge details.

“We’re very close to getting it done,” said Gideon D’Assandro, a spokesman for Chatfield. “It’s an important issue, so he’s glad that they’re continuing to work on it.”

He said it is too soon to say whether House Republicans ultimately will send their bill, which comes far closer to meeting Democratic demands than the measure approved by the Senate, to Whitmer’s desk.

The House and Senate both will hold committee hearings Wednesday related to auto insurance, including a bill from Democratic Sen. Adam Hollier, of Detroit, that would prohibit the use of credit scores in setting drivers’ premiums and redlining practices. While the state’s auto insurance is high, Detroit’s is the nation’s highest.

The Senate adopted a no-fault reform bill a week ago, followed more than a day later by the House in a marathon session that wrapped up overnight Thursday. Both Shirkey and Chatfield have said that lowering car insurance rates by reforming Michigan’s unique requirement that all drivers buy unlimited medical coverage is a top priority this term.

“We are going to move a bill, and nobody should have any doubt about that,” Shirkey told Bridge Tuesday, adding that negotiations will continue to see if they can win over Whitmer on a compromise. “It’s going to be days, not weeks, before we do so.”

Car insurance, however, is not one of Whitmer’s top goals. The first-term governor said Tuesday that she’s putting her energy into fixing the state’s crumbling roads. She did not directly say that she would only consider no-fault reform along with a plan to raise roads revenue, but urged lawmakers to quickly pass a budget that addresses a need for more than $2 billion a year in added revenue for road repairs.

“People want our roads fixed. That is the No. 1 issue, and there (are) crickets at the Capitol right now on that front,” Whitmer told reporters, referring to Republicans. “These guys have got to get off the dime and get moving on actually fixing the damn roads.”

Whether differences over auto insurance reform and road repairs become a stalemate remains uncertain, though both sides are keenly aware of voters’ disgust over political inaction in Lansing.

Both the Senate and House versions of the bill include different tiers of personal injury protection, or PIP, coverage that drivers could choose, including opting out of it altogether if they had other health insurance. The House also added language that requires PIP rate rollbacks for five years, and would prevent auto insurers from using non-driving factors to determine rates once they’re identified by state insurance regulators as part of a study Whitmer ordered last month.

Groups that represent auto insurers and medical providers both say they’re unhappy with provisions in the bill. The Michigan Health & Hospital Association, for one, says it has never embraced a fee schedule that limits what hospitals can charge for care to workers’ compensation rates, as the bills would require. The group also says it opposes allowing drivers to opt out completely from PIP coverage, adding that people should be required to maintain a minimum level of coverage to reduce the risk that people, particularly those with high-deductible health plans, will face surprise high medical bills if they’re badly injured in a crash.

The Insurance Alliance of Michigan, which represents insurers, wants legislators to loosen some of the provisions requiring insurance companies to reduce drivers’ PIP costs and prevent them from using so-called non-driving factors when setting rates, which insurers say help assess risk.

Democrats in the House offered the rate rollback and non-driving factors provisions, though most Democrats opposed the bill on the floor.

Several Democrats in both chambers say the bill language doesn’t guarantee insurers will lower rates after five years, nor does it apply to a driver’s total car insurance cost — adding, for instance, that if insurers are required to reduce PIP premiums, nothing in the bill would keep them from raising rates for another portion of a car insurance policy.

Neither Whitmer nor GOP legislative leaders would offer specific details of the major sticking points between the parties, though Whitmer said neither bill would reduce rates in a way that was enforceable or transparent.

“It would be problematic if politics kept us from moving forward, but I’m serious about the various issues that I care about,” she told reporters. “If there’s something we can do, we will know in short order, I would imagine.”

Hollier, who was one of two Democrats to vote for the Republican Senate bill, said he voted for it anticipating that it would be improved in the House. He said he expects it will be improved again before it goes to Whitmer’s desk.

He said his separate bill related to credit scores and redlining in setting rates, in committee Wednesday, is an opportunity to have another discussion as negotiations continue.

“For the process to work, the bill needed to come out of the Senate the way it did and go through the House the way it did,” Hollier told Bridge. “The bill that she signs into law ultimately will be the best and the most comprehensive auto reform package that we’ve ever gotten.”

Like what you’re reading in Bridge? Please consider a donation to support our work!

We are a nonprofit Michigan news site focused on issues that impact all citizens. In an era of click bait and biased news, we focus on taking the time to learn both sides of a story before we post it. Bridge stories are always free, but our work costs money. If our journalism helps you understand and love Michigan more, please consider supporting our work. It takes just a moment to donate here.

Pay with VISA Pay with MasterCard Pay with American Express Donate now

Comment Form

Add new comment

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.

Comments

middle of the mit
Wed, 05/15/2019 - 1:08am

Anyone that thinks that their auto insurance pays the list price for medical care and not what the insurance lawyers get the insurance co to pay in court is ...a person who has never used auto insurance or has no clue!

I know people who have been through this. Insurance co will send you to a doc that has no more than 3 patients a day. How many "official doctors" do you know that only have 3 or 4 patients per day?

The insurance co can then find you unworthy of your claim with only a single, "independent medical examination" that "they pay for".

Does that sound "independent"?

Ohh I know, they are faking!

As long as is isn't you that is hurting................right?

Don
Wed, 05/15/2019 - 8:41am

Sounds a lot like the Veterans benifites Adminstration<<< They send you to a civilan doctor that they pay to evaulate you disability claim! Abd the Doctor rules that you have no health problem<<< Remember Agent Orange was good for you!!!

Anonymous
Wed, 05/15/2019 - 11:48am

Folks the dems. Work for the Insurance company's not you.don't count on this being solved.

Gary Lea
Wed, 05/15/2019 - 9:12am

C'mon down to Michigan, Tesla vehicles...and insurance!

Chuck Fellows
Wed, 05/15/2019 - 10:44am

No fault is not the problem. Weak law and limited over site are the problems. As many other states do our legislature should set fee schedules for medical, professional service, pharmaceutical, medical devices and attendant care; change "file in use" to "prior review"; set rates based upon driving record only; make insurers subject to anti-trust and FOIA. Those lawful actions will reduce the cost to insurance companies and may interest additional insurers in the Michigan market.
Carefully read HB 4397 at www.legislature.mi.gov, the parts in blue and bold ink. We are being scammed by legislation written by insurance companies to protect insurance companies. The savings being cited by politicians are illusory since the base for any "PIP premium" reduction is defined by the insurance company in secret with no over site. The identification for the use of workers comp fee schedules does NOT identify any savings to accrue to the policyholder. Bottom line, big savings to insurers, none to the policy holder.

Mchelle Teklinski
Wed, 05/15/2019 - 3:06pm

Great points Chuck. I agree

Joe
Wed, 05/15/2019 - 2:54pm

The two issues, fix the roads and fix the high cost of auto insurance are and should remain separate entities. Combining the two into one political compromise is what’s wrong with our system of government today. Address and solve the infrastructure issue and the insanely high cost of auto insurance as the two separate issues that they are. Will the insurance companies give back their profits to fix our roads ?

John S.
Wed, 05/15/2019 - 9:38pm

Agree with most of Fellows' recommendations. Insurance company actuaries will use experience rating (based on driving record) but should not be limited in using other driver information to set rates. There are terrible drivers on the road who manage to avoid getting tickets, perhaps because of inadequate enforcement of traffic laws where they live. There are young drivers without much driving experience. The MCCA was a noble idea, but it was asking too much of human nature to expect those from the insurance industry and medical providers to not fleece this pot of gold.