In a late night session going until 11:55, the house passed two bills revoking a tax credit from auto insurance companies. Repealing the bill passed in 2013, which changed how medical costs for accident victims are covered, inadvertently allowed insurers to claim $80 million in tax credits.
But according to Rep. Tom Cochran, the tax breaks haven't helped anyone in Michigan besides companies.
"Corporate tax breaks have just done nothing but harm the middle class in our state," says Cochran.
But the insurance industry says this bill is not the best solution. Essentially, the $80 million will be deflected onto the policy holders rather than just the insurance companies. That would translate to about a $40 increase in policy premiums, according to Pete Kuhnmuench of the Insurance Institute of Michigan.
But Cochran argues that that is unfair. When the tax loophole saved companies $80 million, policy holders didn't see their rates drop $40.
"If that's what the insurance companies are planning on doing," says Cochran, "I think that's unfortunate."
But Kuhnmuench says it wouldn't have to raise if the house would compromise:
"We had proposed a package of four reforms to try and reign in the costs," says Kuhnmuench.
Those reforms included ending Michigan's lifetime coverage for serious injuries in auto accidents, something no other state requires.
But lawmakers believe the no-fault requirement is a vital piece of Michigan's auto insurance policies and it isn't going anywhere.
