Michigan Republican House leaders are not ruling out anything as they consider a Senate-passed plan to overhaul the state’s auto no-fault insurance that Gov. Gretchen Whitmer has already threatened to veto.
Just hours after the GOP-controlled Senate approved Senate Bill 1 allowing drivers to opt out of mandatory injury coverage included in current auto insurance plans, Whitmer condemned and vowed to veto the measure if the state House passes it as written.
“Today’s action by the Senate creates more problems than it solves. It preserves a corrupt system where insurance companies are allowed to unfairly discriminate in setting rates and the only cuts it guarantees are to drivers’ coverage,” the governor said in a statement early Tuesday evening. “I am only interested in signing a reform bill that is reasonable, fair and protects consumers and this is not it. If this bill comes to my desk, I will veto it.”
For years, reforms to Michigan’s no-fault law have been on the wish list of the insurance industry and others, including Quicken Loans founder Dan Gilbert. Many previous attempts have failed, including a last-ditch effort in last year’s Lame Duck session.
The issue is a top priority for GOP leaders this term. However, the state House has yet to vote on its own legislation.
House members and Whitmer would still need to approve the Senate plan before it could become law. With a Democratic governor threatening to veto that legislation, the GOP House majority may have to be more willing to negotiate.
Asked whether he would support requiring rate reductions — a major point of contention for Senate Democrats who voted against the plan — House Speaker Lee Chatfield (R-Levering) said his caucus is considering everything.
“The people of our state are demanding rate relief. We need to ensure that any reform that we pass actually delivers it, so all options are on the table as we discuss these things,” Chatfield told reporters after the Senate vote. “I’m open to any conversation of any reform that will lower rates for the people of our state,” he continued.
The current Senate-approved plan allows drivers who already have public or private health insurance to opt out of auto insurance that includes coverage for emergency and long term medical care, or Personal Injury Protection (PIP). The current system requires that coverage.
A nonpartisan Senate Fiscal Agency analysis of the legislation says the Senate plan would allow people to choose from two levels of injury protection: $50,000, with an additional $200,000 in case of “medically necessary treatment” at an acute care center or hospital emergency room and a separate $250,000 option.
Sen. Aric Nesbitt (R-Lawton) said drivers will see at least a $180 savings once Michigan Catastrophic Claims Association fees are cut to about $40. Although he said lower-tier coverage would drop prices, that is not required by the legislation.
House Republicans have convened a special committee that has looked into these issues for months.
The panel’s chair, state Rep. Jason Wentworth (R-Clare), said committee members have discussed requiring rate reductions, but House Republicans have not yet committed to anything.
Most Senate Democrats objected to the legislation for failing to include clearly defined rate reductions and not banning insurance companies from using non-driving factors such as credit scores, ZIP codes, gender and education levels in setting rates.
But in the House, mandated price reductions are still on the table.
“It’s something that we’ve discussed in detail in the committee process and we’re going to continue those discussions,” Wentworth said. “I think it’s important that everything is on the table at this point. We’re looking for consensus to get this done for the people of Michigan.”
House Democrats from Detroit — where residents face some of the nation’s highest auto insurance rates — have already come out in opposition to the Senate plan as written.
“Detroiters deserve better than this lackluster reintroduction that does nothing to stop insurance companies from engaging in predatory, discriminatory rate-setting practices,” said state Rep. Sherry Gay-Dagnogo (D-Detroit) in a statement. “While I understand all too well the need to address this issue immediately, the path to rate reductions for Michigan residents must include a crackdown on redlining.”
Groups that support requiring robust medical coverage in auto insurance also opposed the legislation, including the Coalition Protecting Auto No Fault (CPAN), the Genesee County Medical Society and the Michigan Association of Ambulance Services (MAAS).
“Michigan’s EMS providers strongly oppose the Senate no-fault plan that would make it nearly impossible for our first responders to be adequately paid for their work,” said MAAS Executive Director Angela Madden in a statement.
Madden said her association estimates that payments to local ambulance services could be nearly cut in half under the Senate plan.
“Our providers are required to service a patient regardless of their insurance coverage and ability to pay, but the proposed fee schedule would make it extremely detrimental for ambulance providers to cover their costs,” Madden continued.
Michigan Advance reporter Nick Manes contributed to this report.