Detroit Mayor Mike Duggan is tarnishing the already filthy waters of Michigan Auto Insurance Reform Act of 2019 by calling for a change that is not realistic.
When advocates of catastrophically injured motorists visited the Capitol last week to protest the 2019 bill’s pricing measures that could hinder their access to health care, Duggan sought to rekindle the problem of banning geographic-based auto insurance rates from the critic claim that it is a form of redlining.
Detroiters have historically paid significantly more for the same accurate auto insurance coverage as suburban residents based on auto accident damage data.
Duggan plans to tie a geographic usage ban to fix car insurance rates with upcoming 45 percent cuts for medical providers treating injured drivers.
“Geographically, Detroiters are still facing more indictments,” Duggan admitted Tuesday during a press conference with Governor Gretchen Whitmer in East Lansing on an independent matter. “And like I said before [advocates of injured drivers]Before making any changes to increase tariffs, let’s figure out the tariff level for everyone, and I would wholeheartedly support your proposal if it included a provision that everyone in Michigan pays the same geographic tariff. “
Duggan ditched that idea when asked about the imminent introduction of price controls on certain medical services for severely injured drivers on July 2, which was scribbled on the bill hours before legislature passed on the Friday before Memorial Day in 2019 Geographical Pricing would make solving the problem at hand far too complicated.
Duggan – one of the most savvy in Michigan politics – must know the idea of ”leveling” auto insurance rates by effectively making suburbs and rural residents pay more so Detroiters pay less will never fly in the current GOP-controlled legislature.
There would be a bipartisan voter revolt in the suburbs if motorists had to pay higher tariffs so Detroiters could be exempted from insurance costs.
The new law banned insurers from setting premiums for car insurance according to zip code.
But the law did not completely prohibit territorial assessments. Some insurance companies have simply merged a few zip codes to circumvent the ban – a loophole that some of Duggan’s Democrats have warned insurers would take advantage of.
The mayor knows that the new law is not the panacea he was hoping for. For some Detroiters, insuring a vehicle within Detroit’s 137 square miles has not yet resulted in significant savings.
A 2019 study by the Zebra auto insurance price comparison website found that the cost of insuring a 30-year-old male driver and a 2014 Honda Accord EX in Detroit was $ 5,464.
The latest study by Zebra found that the cost of insuring a 30-year-old man driving a 2016 Honda Accord EX hovered around $ 5,072 – still nearly double the national average and a measly decrease by 7 percent since the new law came into force.
“I don’t think it’s right to raise interest rates for Detroiters if they are even higher than the rest of the state,” Duggan said.
While highlighting a legitimate and longstanding complaint for Detroiters, the mayor also reiterates the insurance industry’s discussion point that ensuring drivers injured before 2019 have access to the same care they have in years will somehow lead to that the premiums are skyrocketing current motorists.
The two do not have to be directly connected.
The promised consumer savings of the 2019 Act already came into effect in July 2020, when motorists were allowed to give up unlimited health insurance at lower rates for the personal injury portion of their insurance.
For 11 months, drivers have been allowed to give up unlimited PIP coverage and choose whether to drive on $ 500,000, $ 250,000, or no PIP at all if their regular health insurance or Medicare covers auto injuries. The $ 500,000 and $ 250,000 PIP coverage plans included an average reduction in the PIP portion of a driver’s awards of 35 percent and 20 percent, respectively.
This is Mike Duggan’s “driver’s choice” law.
But the 45 percent cut in care provider rates for home care companies, rehabilitation treatments after brain and spinal cord injuries not covered by Medicare is likely to hit Detroiters who were injured in car accidents years ago. The new law also limits paid home care for family members to 56 hours per week.
Proponents of around 18,000 catastrophically injured motorists are feverishly trying to get GOP lawmakers to reconsider the price fixing that vendors claim will drive them out of business.
Motorists injured prior to 2019 and having their care paid for by the Michigan Catastrophic Claims Association are pending not because of the mandatory rate cuts that have already occurred, but because of the mandatory cost reductions that the law generously grants auto insurance companies.
The MCCA is a $ 23 billion trust fund for injured drivers that covers medical bills in excess of $ 580,000 for the rest of their lives. The MCCA is funded by a separate item from PIP and other charges in the monthly premiums of every insured vehicle in the state.
It is not directly tied to current or future PIP awards to ensure that previously injured motorists receive skilled home care or speech and physical therapy on a daily basis from the MCCA Trust Fund.
The architects of Michigan flawless insurance law specifically foreclosed those costs four decades ago to keep spending on the most expensive auto accidents separate from your typical fender whiplash.
Contrary to what Duggan publicly says, lawmakers could pass a bill saying any driver injured before 2019 must be stocked with no medical reimbursement cap and insurers still have to adhere to last year’s rate cuts.
“They pretend that insurers can just dictate anything – and they have,” said Steve Sinas, a personal injury attorney at Sinas Dramis law firm in Lansing.
If a compromise less draconian than a 45 percent haircut could be reached among care providers for home nursing and rehab centers, the MCCA, coupled with the new statutory cap for hospital and outpatient providers, would save even more significant amounts of money achieve 200 percent of what Medicare pays them.
Again, there is $ 23 billion in the fund to pay for these injured drivers.
Duggan’s attempt to throw the anvil of territorial pricing around the necks of catastrophically injured motorists is precisely why so many past efforts to reform Michigan auto insurance law didn’t get on a governor’s desk: politicians get big and then leave home without having achieved anything.
source https://collegeeducationnewsllc.com/duggan-complicates-fixing-no-fault-insurance-flaw/
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