Theis' No Fault Reform Bill Fails To Pass State House
November 3, 2017
A bill sponsored by a local lawmaker that would have reduced auto insurance premiums was defeated late Thursday by the Michigan House.
After hours of behind-the-scenes arm twisting and an extensive floor debate, the GOP-controlled House voted 45-63 against the legislation, ten votes short. 41 of 45 Democrats and 22 of 63 Republicans joined to reject the measure. The bill sponsor, Brighton Township Republican Lana Theis, who chairs the House Insurance Committee, said she was disappointed in the result. “I do not understand why some of my colleagues voted against no-fault reform which 80 percent of drivers across the state said was needed, and would have given drivers hundreds of dollars in premium savings. The very same people they represent – the people living paycheck to paycheck, facing financial hardships due to out-of-control insurance rates – will continue to be hurt by this broken system. It remains clear just how much special interest groups politicize this very important issue. They profit off the status quo, make a quick buck and pretend like they have the interest of people in mind."
Michigan, the only state to require unlimited lifetime coverage for medical expenses resulting from auto crashes, allows health providers to bill car insurers much more for care than health insurers pay. A $170 annual per-vehicle fee also is assessed to reimburse car insurers for expenses surpassing $550,000 for the catastrophically injured. The legislation sought a 40% cut, for five years, in personal injury protection fees for motorists choosing $250,000 rather than unlimited PIP coverage. That could equal an estimated 20% reduction in the overall cost of a comprehensive policy. Drivers choosing $500,000 in benefits could have seen a 20% PIP reduction, and those sticking with unlimited coverage would have paid 10% less for PIP.
Theis says it would "rein in out-of-control costs, crack down on fraud in the system, give drivers a choice and safe families hundreds, potentially thousands of dollars annually on their auto insurance while making it possible to sustain their unlimited option."
Critics countered that the measure would gut quality benefits for the injured, shift costs to Medicaid and not stop insurers' discriminatory practices by which urban drivers pay more due to factors that have nothing to do with their driving history. They also contended that the rate reductions would not be guaranteed. But Theis was undeterred. “With this legislation falling short, here’s what will happen: Hospitals will continue to charge more for auto accident patients, trial lawyers will continue to make lavish livings off court cases, courtrooms will continue to be clogged, unlimited health care coverage will continue to be mandated and most importantly, auto insurance rates will only continue to go up.”
Even if the measure had won approval in the House , it would have faced an uncertain future in the GOP-controlled Senate, whose leader opposes government-mandated premium reductions. (AP/JK)