Auto No-Fault Reform Re-Write Worse than Original

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 CPAN: Auto Insurance Plan Brings “Unprecedented Limitations’

The Coalition Protecting Auto No-Fault (CPAN) released a study today that slammed House Speaker Jase BOLGER (R-Marshall)’s new plan for auto insurance reform.

According to George SINAS, CPAN’s general counsel, Bolger’s plan proposes “unprecedented limitations on medical benefits” and “significantly restricts” the treatment and services available to individuals injured in car accidents.

In a phone interview today, Sinas called the new plan “significantly worse” than the previous plan House Republican leadership supported.

That’s because, according to Sinas, the restrictions on care are similar, but the new proposal brings more insurer control over medical treatment.

Bolger released the framework of his wide-ranging auto insurance proposal on Feb. 20 (See “Bolger Unveils Auto Insurance Plan With $10M Cap, Premium Drop,” 2/20/14). The idea behind the proposal was to take feedback that lawmakers received on the previous no-fault reform bill,  HB 4369, and improve the language, Bolger said.

One of the changes was that Bolger increased the proposed cap on lifetime personal injury protection benefits from $1 million to $10 million.

But representatives from CPAN argued today that the cap increase is meaningless because of restrictions on care and limitations on treatment embedded in the proposal.

Former Rep. Jim HOWELL, whose son was catastrophically injured in a car accident, took part in a press conference on the proposal today.

“They’re hanging out there this $10 million cap, which sounds like a lot of money, but you’re not going to access it,” he said.

“They’ve giving with one hand and then they’ve taken away with the other. Yet, they’re advertising it like it’s really great because of this $10 million cap.”

In response to the study by CPAN, Anna HEATON, Bolger’s spokesperson, said Republicans aren’t proposing a “no-fault reform.”

“It is auto insurance rate reduction,” Heaton emphasized. “The no-fault system will be preserved as is, where anyone in Michigan who is injured by a vehicle, whether they are a driver, passenger, pedestrian or bicyclist will receive the same benefits for their injuries — the most generous benefits in the nation.”

But, according to CPAN, the new proposal, which is more than 90 pages long, includes nine different limitations on care.

Those limitations include new rules on in-home care, commercially provided care and the location of care. They also include a “rehabilitation cutoff,” according to the study, that says rehabilitation services are payable if they are “reasonably likely to produce significant rehabilitation. Then, CPAN says there’s “plateau cutoff” that stipulates that nothing is payable unless it is “reasonably likely to result in meaningful and measurable lasting improvement in the injured person’s functional status.”

CPAN also criticized today a new option in Bolger’s auto insurance plan that would allow people to purchase cheaper auto insurance policies that would bring “managed care.” CPAN says there are no consumer protections installed in the proposal for those policies.

“Therefore, these policies could be written in such a manner that would severely limit a patient’s right to receive no-fault benefits,” CPAN’s study says.

Bolger’s plan also features low-cost auto policies for individual that are below 133 percent of the federal poverty level. Those policies would include a $50,000 personal injury protection cap.

While supporters see those policies as a way of getting more people to purchase auto insurance, CPAN sees the proposal as discriminatory.

“Unlike other motorists, poor people who buy these low cost policies receive far less than other Michigan citizens who are able to afford a regular auto no-fault policy,” the study says. “Therefore, this appears to be fundamentally inconsistent with the finding recognized by the Michigan Supreme Court in the famous case of Shavers v. Attorney General.”

C-PAN Says $10M Cap A Myth In Auto Insurance Proposal
      
The proposed $10 million cap in House Speaker Jase Bolger‘s revised proposal changing how the state handles insurance for catastrophic auto accident injuries is illusory, defenders of the existing system said Thursday.

For legislators thinking that installing a $10 million cap on benefits might be reasonable as opposed to the $1 million cap in the original bill, a group of attorneys, physicians and other activists who are part of the Coalition Protecting Auto No-Fault said other measures in the new bill make the $10 million cap meaningless.

So restrictive are those new measures that care would cease for the catastrophically injured long before they hit the $10 million level, said George Sinas, an attorney and C-PAN general counsel.

“They’ll never reach that cap because they’ll never access the care,” said John Cornack, C-PAN president.

One of the key new measures, C-PAN officials said, would end rehabilitation services after two years unless “it is reasonably likely that longer treatment may produce significant measurable improvement.” C-PAN officials said the lack of definitions in that language would lead to reduction of services and disputes.

They also cited the weekly limit of 56 hours in compensated attendant care performed by a family or household member, as well as language governing the location of care that says it must be provided “in the most appropriate location where the service, may, for practical purposes, be safely and effectively provided.” Mr. Sinas said the latter language would be used against older people receiving care at home, leading to more going to nursing homes.

C-PAN officials criticized language in the new bill saying insurers processing claims quickly would mean providers charging 125 percent of the workers’ compensation rate for the procedure. They said many physicians say they cannot properly care for patients at the workers’ compensation rate.

The new proposal is in an H-3 substitute to HB 4612.