Michigan 2015 Senate Bill 248 and 249

Last week the Senate rushed SB 248 and 249 through the insurance committee. The bills were voted out of committee and passed by the Senate. These bills significantly affect our current automobile no-fault insurance system, including, most significantly, the Michigan Catastrophic Claims Association (CAT Fund). The bills have been sent to the House Insurance Committee. Obviously the plan is for these bills to be presented to the House of Representatives for their vote. WE urge you to contact your representative and tell them to VOTE NO on these bills.

Lets start by asking why are any changes needed to the CAT Fund based on the following FACTS:

Although the CAT fund system was devised by the insurance industry, make no mistake – it is the insured drivers in Michigan who always have and continue to fund that system – not the insurance industry. In other words, WE funded the catastrophic claims fund – not the insurance companies.

The fact is that WE all pay $145 per year per vehicle into the catastrophic claims fund. This adds 500 million dollars per year into the fund from these policy fees alone.

The increase in the money in the fund was 2.4 billion from 2010 to 2011 meaning that as of 2011 there was 13.8 billion dollars in the fund.

According to a recent report from a republican state senator who appeared on WJR promoting the use of the interest from the fund to pay for road repairs in Michigan, there is now 16.8 billion dollars in the fund. This represents a 3 Billion dollar increase in only three years without any changes or limitations on our system and in spite of the payments made on these claims which represent a minor portion of the no-fault claims in our state.

Quite simply, WE, meaning the insured drivers in Michigan, put the money in this fund. Therefore, when the benefits are paid to catastrophically injured accident victims, the benefits are being paid with our money – not the insurance company’s money. Their adjustors simply administer the claims and then they get every penny back from the CAT Fund. So why are they trying to change the system? MORE IMPORTANTLY, WHY ARE THEY ATTEMPTNG TO DISSOLVE THE CURRENT MICHIGAN CATASTROPHIC CLAIM ASSOCIATION WITHOUT STATING WHERE THE 16 PLUS BILLION DOLLARS THAT IS CURRENTLY IN THE CAT FUND WOULD GO? Because they are looking for a way to turn our money into their money at the expense of the relatively few catastrophically injured victims who desperately need this care and assistance. There is a cash grab going on here at the expense of our catastrophically injured citizens.

Furthermore, the consequences of these bills are not good for our state and most importantly, our citizens.

Insurance industry bills SB 249 and SB 240 are a clear confirmation that the auto insurance industry aims to effectively repeal Michigan’s model no-fault insurance system to line their own pockets. If these bills are enacted, the consequences would be dire:

• Reduced access to medical care -Trauma centers and clinics and smaller hospitals will close as a result of unfunded essential medical and rehabilitation services.

• Forcing injured people out of their homes and into Medicaid institutions. – drastic cuts and caps for critically-needed attendant care would make it all-but impossible for family members to provide care for loved ones, forcing them into higher-cost institutions. These bills would place a cap on payment for family attendant care payments of $15 per hour. Even worse, the bill would limit care to 24 hours per day, even when the injured individual needs, and has, more than one caregiver. This means that people who have been catastrophically injured in a collision, including paralyzed individuals, who need more than one round the clock caregiver to keep hem safe and care for them would only be reimbursed for one caregiver. Apparently they will be forced to find a second person who is willing to and who has the means to volunteer their time to be there to ensure their safety. Of course, if a paralyzed individual cannot find a second person to do this for free, there is no explanation for how they would be safely extracted from their home in an emergency. One must presume that the Senate and the insurance industry has decided that these people are expendable because, since we have no idea when things like a home fire will break out, it is now apparently ok to expose these people who choose to live at home to significant safety risks such as burning to death.

• Increased insurance premiums – these bills will result in the need for consumers to additional insurance coverage. Health care premiums would also increase due to a massive cost shift of health care coverage.

• Increased taxes – resulting from a massive cost shift from no-fault insurance to Medicaid and Medicare. Taxpayers could be on the hook for up to an extra $800 million dollars and at a time when our state is still recovering from a critical budget crisis.

• A loss of jobs – these bills will force the shuttering of medical facilities all over the state, and the firing of critically needed nurses and doctors and specialists. Michigan’s doctors and nurses and other care providers will be forced to leave the state to make a living. People would lose the closest and best medical care when they need it the most–after a catastrophic auto accident.

The insurance industry refuses to guarantee any premiums reductions, none at all. No benefit for the consumer. The best the insurance industry can offer is that there might be a small reduction in the mere 15% of the insurance premium related to these insurance bills, but they offer no guarantees of a reduction and no promise that rates won’t go back up again in a few months.

The losses to the policy holders are guaranteed however. Every driver in Michigan is required by law to buy auto insurance and will lose essential insurance benefits they are still forced to pay for under mandatory No-Fault. However, the state will lose medical care and jobs. The consumers will pay for these losses many times over in higher taxes and additional hidden insurance costs, and the industry will keep the money they have paid for coverage the Insurance companies will no longer provide.

We are certain that most people who have a family member, loved one or friend who has been the victim of a catastrophic accident, such as former Republican Senator Jim Howell who, along with his wife, provides 24/7 attendant care to his son, would have no problem explaining that this bill would destroy their family unit. I am sure that Oakland County Executive L. Brooks Patterson would similarly explain, once again, why these changes are so harmful to injury victims.
Senator Rebekah Warren already told the Senate about her sister who was catastrophically injured in a traffic crash and the critical role the state’s insurance system played in her recovery. We have a number of similarly situated clients whose parents and family members would do the same thing given the chance.

With these facts in mind, it is clear that these ‘insurance welfare’ bills are bad for Michigan and WE URGE EVERYONE TO CONTACT THEIR HOUSE OF REPRESENTATIVES MEMBER AND TELL THEM TO VOTE NO ON THSES BILLS!