Auto insurance law touted as battle over reform echoes on third anniversary

Insurance providers and business groups praised state leaders this past week on the three-year anniversary of the signing of Michigan’s historic auto no-fault reform, the latest parry in a continuing lobbyist battle over the future of the controversial reform. 

The letter to Democratic Gov. Gretchen Whitmer, Republican House Speaker Jason Wentworth and GOP Senate Majority Leader Mike Shirkey touted the recent $400 rebates to Michigan drivers, lower auto insurance costs, upticks in newly insured drivers and the entry of new insurance companies in the marketplace.

“Bipartisan auto no-fault reforms have cracked down on fraud, stopped the overcharging and finally gave Michigan consumers a choice,” according to the letter from groups that included the Insurance Alliance of Michigan, Mackinac Center for Public Policy and the Michigan Chamber of Commerce. 

The letter came on the third anniversary of Whitmer’s signing the bill into law on Mackinac Island in 2019 and as the benefits of the reform continue to be debated.

As recently as last month, groups opposing the law’s fee cut for medical providers sent a letter to Whitmer asking her to advocate more forcefully for changes to the 2019 law. A Republican lawmaker surprised her colleagues with an unannounced hearing on changes to the reform, causing several to walk out.  And billboards at interchanges near the Michigan Capitol have carried warring messages for several weeks over the benefits and faults of the no-fault reform. 

On Tuesday, the Michigan Court of Appeals is scheduled to hear oral arguments in a key case challenging whether elements of the 2019 law can be applied retroactively to the roughly 18,000 individuals who were insured and injured prior to the law’s passage. 

Wentworth has said he would make no changes to the law through the rest of session, but Whitmer has voiced a willingness to tweak certain elements, including a 45% cut to what medical providers can charge for services rendered to individuals injured in a catastrophic crash. 

Thursday’s letter pushed back on complaints over the fee cut, calling it a “critical part of reform” meant to rein in “egregious overcharging by medical providers.”

“Let’s be clear — people are still receiving the medically necessary care they need under the law,” the letter said. 

Tom Judd, board president for the Michigan Brain Injury Provider Council, said the celebration of one-time rebates comes at the cost of access to care for thousands of car crash survivors. 

“There’s a balance here where the governor needs to look at what the priorities are,” Judd said. “The $400 rebate is obviously something the governor is very proud of. But what about the families that are losing access to care?”

The GOP-led Legislature — in response to complaints from medical providers who said they could no longer provide the care they once did to auto crash survivors under the new fee schedule — set up a $25 million fund that medical providers could apply to if they could show a “systemic deficit” resulting from the fee cuts. But medical providers have said the application process and obstinate insurance companies make it nearly impossible to receive help. 

The Thursday letter noted several applications still are pending for the fund and thanked the leaders for their “continued commitment” to the reform. 

“Despite efforts by some to turn back the clock on reforms, the facts and data compel us to recognize bipartisan reforms are creating savings for 7.2 million Michigan drivers, cracking down on fraud, stopping overcharges and giving Michigan consumers a choice,” the letter said.

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