Earlier this week, Republican legislators and the Insurance Coalition proposed changes to Michigan's No-Fault Auto Insurance system that would harm seriously injured accident victims, while benefiting insurance companies (tweet this). The proposed changes, which can be viewed here, would significantly reduce benefits for catastrophic claims without any guarantee that Michigan drivers would see a reduction in their rates. Specifically, the bill proposes:
1. Capping benefits for uninsured drivers, pedestrians, bicyclists or other individuals injured in an auto accident whose claim is handled by the Michigan Assigned Claims Plan.
- $400,000 cap on claims handled by the Michigan Assigned Claims Plan
- 56 hour per week cap on family provided attendant care
- Creation of Fraud Authority funded by insurance companies
The Michigan Assigned Claims Plan (MACP) is a State Agency that assigns an insurance company to provide benefits when no no-fault insurer is available and the injured party is not excluded from no-fault coverage (related: What is the Order of Priority for No-Fault Benefits in Michigan?).
For example, imagine a resident of Detroit who lives alone and does not require a car for transportation. If he or she was involved in an accident with an uninsured driver, his or her first party no-fault benefits would be capped at $400,000. For seriously injured accident victims, medical treatment can cost hundreds of thousands of dollars in the first week alone. The existence of a cap will have no effect on the need for treatment above that dollar amount. Rather, the injured victim would likely then need to rely on government programs like Medicaid.
2. Capping insurer's responsibility to pay for family provided attendant care for injured relatives to 56 hours per week.
Most seriously injured accident victims will require attendant care benefits after they are released from the hospital. These benefits are prescribed by doctor and include services such as supervising the injured claimant, administering medications, wound care, bathroom assistance, transportation, etc. While attendant care benefits can be provided by a nurse, frequently they provided by a family member of the injured party. This allows the injured victim the comfort of being cared for by a loved one who knows them best, and allows the family member providing care to be compensated at a reasonable hourly rate.
The proposed legislation would cap the number of hours for family provided attendant care to 56 per week. However, many catastrophically injured accident survivors require 24 hour attendant care. Families will have no choice but to hire an outside nursing service, which will be much more expensive for no-fault insurers than simply paying a family member.
Furthermore, while the bill creates a "Fraud and Theft Prevention Authority" to limit insurance fraud, the authority would be funded by insurance companies and would be exempt from disclosure under Michigan's Freedom of Information Act.
TAKE ACTION - WHAT YOU CAN DO
Contact your State Representative or Senator and tell them to vote no on the proposed changes to the Michigan No-Fault Auto Insurance System and instead work on reasonable reforms that will benefit accident victims and health care providers, and not just insurance companies.
To Find your State Representative click here
To Find Your State Senator click here
For a sample letter to e-mail to your State Senator or Representative click here