As the state’s top legislators remain optimistic about negotiations over no-fault auto insurance reform, one of its biggest unelected political players is preparing to take the issue to the people.
The Detroit News first reported over the weekend that Quicken Loans billionaire and Detroit real estate magnate Dan Gilbert is readying a long-discussed ballot initiative that would put a petition on the ballot that’s reportedly similar to the plans already passed by Michigan’s GOP-controlled Legislature.
By Monday afternoon, Gilbert’s top lobbyist, Jared Fleisher, vice president of government affairs at Quicken Loans, was confirming that without a deal at the Capitol, they could soon launch that ballot drive.
“We have said all along that we will take the necessary steps to prepare for a ballot initiative only if there is no resolution at the negotiating table,” Fleisher said in a statement. “But we are also hopeful and optimistic that ongoing, good-faith negotiations between the Governor and legislature will lead to an agreement that delivers real and significant savings for Michigan drivers.”
Gilbert would need 340,000 signatures from around the state within six months. Should he accomplish that, the Legislature would have the option to adopt the petition language or it would go to the ballot.
If lawmakers voted in favor of the petition language, the legislation would become law without the governor’s signature.
A spokeswoman for state Senate Majority Leader Mike Shirkey (R-Clarklake) said Monday that Gilbert’s presence in the decades-long debate over car insurance reform serves as a reminder that citizens want relief from having the country’s highest rates.
“The Majority Leader continues to discuss no-fault reform legislation with the Governor,” Shirkey spokeswoman Amber McCann wrote in an email on Monday afternoon. “Mr. Gilbert’s pursuit of an initiative underscores just how important this issue is for Michigan families. The Majority Leader is committed to delivering a solution.”
A spokesman for state House Speaker Lee Chatfield (R-Levering) did not immediately respond to a request for comment.
According to a spokeswoman for Gov. Gretchen Whitmer — who has said she’d veto either of the two bills already passed by the state House and Senate — closed-door negotiations continued over the weekend, and progress has been made.
“We are pleased that the lines of communication are open among all parties and that talks are progressing,” Whitmer spokeswoman Chelsea Lewis said in a statement.
“There has been more progress made in the last four days than the last four years. Discussions are ongoing, and the governor remains committed to auto insurance reform that protects Michigan motorists and provides financial relief.”
The two pieces of legislation passed so far by the House and Senate would allow drivers to pick from a variety of coverage options for personal injury protection (PIP), which proponents argue would lower auto insurance rates. Right now, all auto insurance plans in Michigan are required to provide unlimited lifetime medical coverage.
But allowing people to opt for lower amounts of coverage would lead to growing Medicaid costs in Michigan, according to an analysis by the nonpartisan state Senate Fiscal Agency. Their analysis estimated that without unlimited PIP, Medicaid costs in Michigan would grow $65.9 million over a 10-year period.
The SFA analysis also notes, however, that the impact to Medicaid costs would depend on how many drivers opt for unlimited PIP coverage.
“The more available unlimited PIP coverage was, the lower the Medicaid costs would be, as more people would potentially purchase unlimited PIP coverage,” the SFA analysis says. “If unlimited PIP coverage were not generally available, then the increase in Medicaid costs would be greater.”
Consumer protection and medical groups like the Michigan State Medical Society (MSMS) oppose policy solutions that would allow drivers to operate vehicles without full insurance protection.
In a Monday afternoon letter, the MSMS argued that the House legislation in particular is a give-away to car insurance companies, and urged Whitmer to veto any similar bills, which she has said she would do.
“The Michigan House of Representatives has passed a dangerous bill (HB 4397) that strips away health care coverage and consumer protections from the people of Michigan and does not provide any guaranteed rate reduction on the total cost of our auto insurance,” the MSMS statement said.
“This bill also does not protect consumers from the unfair and discriminatory practices insurers use in setting our auto insurance premiums. This bill is bad for everyone – except the big auto insurance companies.”
Last week, Whitmer said she was open to allowing drivers to select an option of $250,000 or more in personal injury protection, but it was unclear on Monday just where things stand in terms of the specifics of negotiations.
Fleisher, the Quicken lobbyist, argues that the high cost of auto insurance in Michigan stands as an economic hurdle that needs to be cleared for the state to move forward.
“The current Michigan auto insurance no-fault law is the single biggest obstacle in the way of retaining and attracting talent and further growing Detroit and Michigan’s economy,” said Fleisher. “This scheme is unique to Michigan. Each of the other 49 states have all found rational and smart ways to deal with auto insurance without abusive, egregious insurance rates that are unaffordable for a large percentage of Michigan drivers.”