New No-Fault Legislation Needs to be Properly Scrutinized

This commentary was written by State Representative Dian Slavens, D-Canton.

I am still extremely dismayed with the House Insurance Committees' actions on Thursday, Oct. 13 for not allowing adequate time for committee members to consider amendments to proposed no-fault reform legislation that were offered an hour-and-a-half before committee began.

Not only did committee members not have a chance to fully grasp the amendments being presented but the general public, those that will be most affected by these changes to a 40-year law are being completely left in the dark about what this means for their coverage.

For the leadership to spring changes on the committee members immediately before they take a vote on the legislation is an unprecedented move and defies the democratic process.

On a 9-8 vote, the House Insurance Committee moved an amended version of House Bill 4936 to the House floor for consideration. In addition, an amendment was voted down offered by my colleague Rep. Phil Cavanagh, D-Redford Twp. which would have allowed a more thorough public review to determine whether no-fault reform is actually necessary.

This legislation claims to reduce the high auto insurance rates we pay in Michigan. At no point during committee testimony was any proof shown that this will be the case. Instead, the changes are focused on padding the pockets of insurance companies at the expense of consumer protection and increased transparency.

The bottom line is that the proposed reforms take away protections that are critical to helping Michigan residents recover from catastrophic accidents without the promise of any rate reduction.

HB 4936 will do the following:

• Impose lifetime caps on auto injury benefits between $500,000 and $5 million. CPAN research from public sector consultants show that PIP caps will shift at least $30 million in the injury costs onto the state Medicaid system. A separate House Legislative Analysis confirms that a cost shift will occur.
• Mandate government price controls in the form of workers compensation fee schedules on health care providers treating auto accident victims. The Michigan Health & Hospital Association surveyed its members earlier this year to consider this threat and calculate the impact. Several hospital systems have reported that such a change would reduce reimbursement from auto accident-related cases by a total of $10 million or more per hospital system annually.
• Set attendant care and nursing payment rates for persons caring for catastrophically injured accident victims. Testimony at the house insurance committee indicated that care could not be provided at the maximum $11 per hour cap. 
• Block voters from their constitutional right to seek a referendum to overturn the legislation. A $50,000 appropriation remains included in the bill. In 1994 voters defeated Proposal C, which included many of the same provisions as this bill. However, appropriation bills cannot be overturned via public referendum.

I worked in the health care field for 20 years and I know how critical it is for people with traumatic injuries to be able to receive the proper care and rehabilitation necessary. Additionally, this could be extremely costly for our already struggling state. If PIP caps are implemented, many catastrophic accident victims will be forced onto Medicaid.

When dealing with a topic of such a significant nature, why would we not allow all those affected the chance to make their voices heard? We cannot afford to rush through legislation that would harm so many of our citizens without proper scrutiny.

Rep. Slavens can be reached toll-free at 888-347-8021 or by email at DianSlavens@house.mi.gov.