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State House holds first hearing on auto no fault overhaul

wrecked car
Robbie Howell
/
Flickr - http://j.mp/1SPGCl0
If you're hurt in an auto accident, the personal injury protection part of Michigan's mandatory no-fault insurance will pay all of your medical costs. It's lifetime, unlimited coverage.

The state legislature held a marathon committee hearing on a bill to overhaul Michigan’s auto insurance law Tuesday. The committee heard ideas for potential changes to the bill.

One idea is to prevent insurance companies from using credit scores to influence rates.

Mayor Mike Duggan had a major hand in crafting the bill the committee discussed. He said he’d like to see changes to the bill; but he said the focus needs to be on passing immediate rate relief.

“If we can get it done with credit scores I’m in favor,” Duggan said. “If we get it done without credit scores it’s still a significant relief.”

HB 5013 would let drivers cap their health coverage. Right now all drivers are required to have unlimited lifetime benefits for catastrophic injuries from car accidents. Opponents to the unlimited coverage requirement say it’s why Michigan’s rates are among the highest in the nation.

But a study from the nonpartisan House Fiscal Agency says getting rid of the lifetime benefit requirement could cost Medicaid 10 million dollars in the first year. That number could go up to 150 million dollars a year within ten years. That’s because the government would have to make up for the people who no longer get unlimited lifetime benefits.

Bill sponsor Lana Theis (R-Brighton) is a bill sponsor said it’s not a direct cost shift.

“Right now every single citizen in Michigan is paying for unlimited lifetime medical benefits that they’re very likely not to need and that they probably already have another insurance to cover,” she said.

But not everyone agrees. Some argue there are ways to lower rates without offering lesser coverage.

“If we’re gonna talk about rates, why don’t we talk about some basic principles of fairness?” said Tom Sinas of the Coalition Protecting Auto No-Fault. “Why do we let people who live in Dearborn be charged twice as much as people who live in Ann Arbor just because of where they live.”

Before becoming the newest Capitol reporter for the Michigan Public Radio Network, Cheyna Roth was an attorney. She spent her days fighting it out in court as an assistant prosecuting attorney for Ionia County. Eventually, Cheyna took her investigative and interview skills and moved on to journalism. She got her masters at Michigan State University and was a documentary filmmaker, podcaster, and freelance writer before finding her home with NPR. Very soon after joining MPRN, Cheyna started covering the 2016 presidential election, chasing after Donald Trump, Hillary Clinton, and all their surrogates as they duked it out for Michigan. Cheyna also focuses on the Legislature and criminal justice issues for MPRN. Cheyna is obsessively curious, a passionate storyteller, and an occasional backpacker. Follow her on Twitter at @Cheyna_R
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