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Michigan House Insurance Committee Votes to Fundamentally Destroy Auto No-Fault

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 LANSING — The Michigan House Insurance Committee approved legislation today that would fundamentally destroy the Michigan auto no-fault system as we know it.  In response to the committee’s action, Coalition Protecting Auto No-Fault (CPAN) president John Cornack issued the following statement:

            “The actions by the house insurance committee today were completely and utterly irresponsible. It is irresponsible to approve legislation that would shift millions of dollars onto already over burdened taxpayers. It is irresponsible to approve legislation that kills thousands of good-paying jobs. It is irresponsible to approve legislation that circumvents voters’ constitutional rights. It is irresponsible to approve legislation based on unverifiable data controlled by a single interest group. And finally, it is irresponsible to approve legislation that destroys the best auto insurance system in the country,” said Cornack.

Cornack notes that Gov. Snyder has stated early on that his administration would be committed to making transparent, data-driven decisions. “If the governor wants to stay true to his commitment to support policies based on facts, then I would hope this legislation would be rejected outright until the data being presented by the insurance industry and MCCA can be verified by the media and independent sources,” said Cornack. Currently, the MCCA is not subject to FOIA requests or the open meetings act.

During the two weeks of hearings several legislators and speakers testifying at the committee hearings asked for information controlled by the MCCA.

House Bill 4936, sponsored by Rep. Pete Lund (R-Shelby Township,) will:

  • Impose lifetime caps on auto injury benefits between $500,000 and $5 million. CPAN research from public sector consultants show that PIP caps will shift at least $30 million in the injury costs onto the state Medicaid system. A separate House Legislative Analysis confirms that a cost shift will occur.
  • Mandate government price controls in the form of workers compensation fee schedules on healthcare providers treating auto accident victims. The Michigan Health & Hospital Association surveyed its members earlier this year to consider this threat and calculate the impact. Several hospital systems have reported that such a change would reduce reimbursement from auto accident-related cases by a total of $10 million or more per hospital system annually.
  • Set attendant care and nursing payment rates for persons caring for catastrophically injured accident victims. Testimony at the house insurance committee indicated that care could not be provided at the maximum $11 per hour cap.
  • Block voters from their constitutional right to seek a referendum to overturn the legislation. A $50,000 appropriation remains included in the bill. In 1994 voters defeated Proposal C, which included many of the same provisions as this bill. However, appropriation bills cannot be overturned via public referendum.

“Anyone who has dealt with the horrors of seeing their family injured in an auto accident understands this bill doesn’t make sense,” said former republican state representative Jim Howell, whose son was seriously injured in an auto accident seven years ago. “Not only does this legislation not make sense for accident victims, it does not fit with republican values.  Why would a conservative vote to add costs to our state welfare system and take away constitutionally protected rights of public referendum?”

The bill was approved by the committee with nine yes votes to seven no’s.  It will now go to the Michigan Senate for further debate.

American Association for Justice Michigan Association for Justice The National Trial Lawyers Million Dollar Advocates Forum State Bar of Michigan