Coalition Protecting Auto No-Fault

Lansing – House Speaker Jase Bolger today issued several proposed changes to Michigan’s auto no-fault insurance laws, claiming his proposals reflect a “compromise.” Reacting to Speaker Bolger’s proposals and his claims of a compromise, Coalition Protecting Auto No-Fault (CPAN) President John Cornack issued the following statement:

“If Mr. Bolger believes these new insurance-industry backed changes to Michigan’s no-fault system are a ‘compromise’ then he must be using a non-traditional definition of the word. Not a single CPAN member has agreed to his so-called reforms,” said Cornack.

“While this latest proposal is slightly different from what the insurance industry pushed for last year, the fact remains that Speaker Bolger and the insurance industry are still pressing forward with changing the state’s auto insurance system without the necessary data from the Michigan Catastrophic Claims Association. The transparency of MCCA is critical to auto no-fault in Michigan, and without having access to the actuarial tables and economic assumptions it uses to make its projections there is no way to know what changes are appropriate.

Without this information, Speaker Bolger is asking his members to make a blind vote that could cause our state’s most seriously injured people to lose the care they need, and force health care providers to lose millions of dollars.”

In December 2012, CPAN and the Brain Injury Association of Michigan won a lawsuit in Ingham County Circuit Court that would require the MCCA’s rate-making documents to be made public. The MCCA has since appealed that ruling and the case is awaiting a decision by the Michigan Court of Appeals.

Cornack also points out that while Speaker Bolger’s plan provides a guaranteed 10 percent savings over three years, when the $25 HICA (Health Insurance Claims Assessment) tax is factored into the proposal, the savings remain negligible.

“The average auto insurance policy in Michigan is roughly $1,100. So the Speaker’s proposal will provide drivers with a savings of $10 a month for three years but then turn around and hit them with a new $25 per year Medicaid tax. So in the long run, there are no real savings at all, and all the while Michigan drivers will be losing the best injury care in the country. That just doesn’t make sense,” said Cornack. “Real rate relief would involve stopping credit scoring and giving the insurance commissioner greater powers to approve rates to ensure they are fair.”