LANSING, Mich. — Democratic lawmakers held a virtual press conference Wednesday morning to urge support for the passage of two bills currently in the State Legislature that they say would prevent certain fee schedule changes within the no-fault auto reform law, which is set to go into effect in July.
The fee schedule that is particularly concerning for lawmakers and advocates alike is the cuts to reimbursement percentages that insurance companies would be required to pay towards post-acute, in-home care.
As of July 1, 2021, once the law goes into effect, insurance companies will only reimburse rehabilitation providers at 55% of what the providers were charging in January of 2019.
"These rehabilitation centers, most of which are local small businesses, will not survive a 50% pay cut. Some are already reporting that they plan to lay off their staff and close their doors on June 30, giving pink slips to frontline care providers and throwing the vulnerable, gravely injured accident victims they care for into complete disarray," said Rep. Julie Rogers (D–Kalamazoo) in Wednesday's press conference.
"This issue is simply too serious to ignore any longer. It's a crisis."
Representative Rogers, along with Rep. Brenda Carter (D–Pontiac), and Rep. Donna Lasinski (D–Scio Township), urged their fellow lawmakers to take action on two bills already in the legislature—House Bill 4486 and Senate Bill 314.
“Insurers are fighting every step of the way to avoid paying for care promised in auto insurance policies. That means premiums we paid for, we are getting less than what we were offered," Representative Carter said Tuesday.
"In fact, the situation is so dire that unless we take legislative action, thousands of vulnerable auto accident victims will lose the care they need to thrive, and in many cases to survive.”
- WATCH: State Democrats discuss no-fault auto reform laws
- As July deadline looms, advocates say auto industry executives refused to discuss no-fault reforms
- Attorney files lawsuit challenging ‘constitutionality’ of new no-fault law
Senate Majority Leader Mike Shirkey said in a statement about the bills currently sitting in the legislature, in part, “The historic auto insurance reform is working. Rates are dropping. For the first time in seven years, Michigan is not the most expensive place in the country for auto insurance. We certainly must care for the most vulnerable among us, and we will look at taking up additional reforms that may be necessary when plan goes fully into effect in July.”
But according to The Zebra, a website that compares insurance rates from across the country, in their 2021 State of Insurance report comparing insurance rates in every state, that while Michiganders insurance rates dropped nearly 18%, we are still the most expensive state in the country.
Following Wednesday's press conference, Rep. Donna Lasinski met with several advocates present outside the House chambers inside the Capitol, telling them that she is committed to getting the situation resolved.
We reached out to the Insurance Alliance of Michigan to get their take on Wednesday's press conference and the ongoing efforts surrounding SB 314 and HB 4486.
Erin McDonough, executive director of the alliance, said in a statement, "The reforms passed by the Legislature to fix Michigan’s broken, outdated auto no-fault system are working. The reforms are lowering rates for drivers across the state, bringing more competition into Michigan and encouraging tens of thousands of people to get car insurance again because they can finally afford it—all while ensuring drivers with unlimited, lifetime medical benefits can still receive care. Sadly, special interests are resorting to scare tactics and using misinformation in an attempt to protect their golden goose and preserve their ability to overcharge and price gouge Michigan consumers. We urge the Legislature to stay the course and let these reforms keep working.”