SB 248 Auto Insurance Reform Talking Points
Ø The auto insurance reforms currently being considered in the state legislature will allow consumers to continue to receive the best medical benefits in the country.
· Unlimited, lifetime medical benefits for individuals injured in auto accidents will continue if Senate Bill 248 is enacted.
Ø Senate Bill 248 would address the current problem of medical providers charging auto insurance carriers significantly higher rates than other health insurance payers.
· Auto related injured patients are often charged up to three and four times more for medical treatment than others. For example, an emergency room visit for an individual hurt on the job is $154.
An emergency room visit for an auto injured insured is $443. SB 248 would provide fair and equitable reimbursements to medical providers without gouging those injured in automobile accidents.
Ø The continuation of the state’s auto insurance law with its very generous medical benefits is a concern as increased costs results in an increasing number of uninsured drivers.
· During the last decade, the average auto insurance Personal Injury Protection (PIP) medical claim rose more than 230%, from $13,617 in 2000 to $46,022 in 2014. Source: ISO/PCI Fast Track Data.
· Costs for the Michigan Catastrophic Claims Association (MCCA) assessment have risen 2900% from 1998 to 2015. The MCCA currently pays out over $80 million per month
for catastrophic injuries. Source: MCCA.
· Estimate indicate over 20% of the drivers statewide are driving without insurance coverage and over 50% in the Detroit area are uninsured.
Ø Senate Bill 248 will provide some much needed relief for Michigan consumers, who pay significantly higher auto insurance premiums than drivers in surrounding states. Drivers will receive a $100 per car rate rollback on their policy, or approximately $700 million statewide.
· The average auto insurance premium per car in Michigan is $1,171 according to the most recent data available by the National Association of Insurance Commissioners. Meanwhile, neighboring
state residents pay a lot less due to lower mandated benefits. The average auto insurance premiums per car in states bordering Michigan follow: Ohio ($713); Indiana ($723); Illinois ($805)
and Wisconsin ($666). Source: National Association of Insurance Commissioners.
· Michigan’s average premium rose from 12 highest in the country in 2007 to 7th highest in 2012. Source: National Association of Insurance Commissioners.
Ø Insurance fraud drives up the cost of insurance for everyone. SB 248 will provide for an Insurance Fraud Authority to go after schemers who abuse our no-fault insurance system.
· Michigan’s unique unlimited, lifetime no-fault medical benefits have led to increasing fraudulent claims. “Suspicious claims related to auto insurance fraud in Michigan
is estimated at $400 million. Source: Study by Hillsdale Policy Group.
· Another reason fraud is problematic is because Michigan is one of only eight states without a fraud authority to investigate and prosecute fraud.
Source: National Insurance Crime Bureau.
Ø SB 248 provides reimbursement for non-skilled family-provided attendant care for $15/hr.
· The legislation still provides for 24/7 care of individuals injured in auto crashes. The bill would limit non-skilled family attendant care to $15 an hour, totaling up to $131,000 annually.
There is no hourly limit on skilled attendant care. In addition, there would be a limit of 24 hours per day of care whether it is provided by for skilled or non-skilled individuals.
However, there is a process to obtain a medical exception if additional assistance is needed.
Ø SB 248 provides a new system to pay catastrophic auto accident claims and will address transparency concerns raised by the public.
· The Michigan Catastrophic Claims Association will continue to reimburse auto insurance claims for everyone currently in the system at the effective date of the legislation.
The new Catastrophic Claims Corporation (MCCC) will be a public corporation that will directly pay claims over $545,000 (adjusted by inflation) and be subject to the Open Meetings Act
and Freedom of Information Act.