Correction: An earlier version of the story incorrectly stated how many Detroit Democrats voted in favor of the measure. Four of Detroit 10 representative's vote in favor.
Lansing — The effort to change Michigan’s generous and expensive no-fault auto insurance law is on life support after the state House rejected a proposal by Speaker Tom Leonard and Detroit Mayor Mike Duggan in a late Thursday vote.
After two days of intense lobbying and a host of amendments, Leonard held a vote on the bipartisan plan to require a rollback of among the nation’s highest auto insurance rates by letting drivers choose plans that cap currently unlimited lifetime medical benefits for injured motorists.
The DeWitt Republican, a candidate for attorney general in 2018, held the vote to put the state lawmakers on record even though the speaker suspected he did not have enough support to win passage.
The proposal failed on a 45-63 vote, with four Democrats and 41 Republicans voting in favor. Leonard said the legislation would need at least 10-15 Democrats to back the plan.
“At this time, the House has to move on to other priorities like mental health reform and skilled trades education,” Leonard’s spokesman Gideon D’Assandro said in a Friday email. “It could come up again, but it will take a change of heart on the part of Detroit Democrats.”
Duggan, a Democrat, spent two days in Lansing lobbying for the measure in the midst of a re-election campaign against state Sen. Coleman Young II, D-Detroit. Four of Detroit’s 10 representatives voted in favor — Reps. Leslie Love, Sylvia Santana, Wendell Byrd and Betty Scott.
Under the plan, insurers would have to cut the personal injury protection portion of motorists bills by an average of 40 percent for policies that cap medical coverage at $250,000, 20 percent for $500,000 policies or 10 percent for polices with unlimited medical coverage.
Rep. Sherry Gay-Dagnago was among the Detroit Democrats opposing the plan, arguing lawmakers needed to address alleged “red-lining” by adopting her amendment to ban insurers from basing rates on non-driving factors such as ZIP code. Rep. Jeremy Moss, D-Southfield, said he opposed the plan for the same reason.
Senate Majority Leader Arlan Meekhof, R-West Olive, has wanted to revive interest in a plan the Senate approved late last year that would create a fraud authority, limit paid “attendant care” hours for family members of auto accident victims, and cap benefits in assigned claims cases involving uninsured motorists or pedestrians.
Last year’s Senate proposal was supported by both hospitals and the insurance industry, but did not receive a vote in the GOP-controlled House.
“The Majority Leader has not made a decision one way or another,” spokeswoman Amber McCann said in a Friday email. “He will discuss the issue with his colleagues in the Senate, first.”
Meekhof declared the Duggan-Leonard plan “dead, dead, dead” because of the mandatory 20 percent rate cut he described as “price fixing,” not a market-based system.
The House reform plan also failed Thursday night because it was opposed by 22 Republicans.
Seven of eight Oakland County GOP lawmakers rejected the plan that also was opposed by influential county Executive L. Brooks Patterson, who has criticized scaling back lifetime medical benefits after being seriously injured in a 2012 car crash in which driver James Cram became a quadriplegic.
Patterson called the plan “the greatest robbery since the Great Train Robbery in 1855.”
The Legislature and Gov. Rick Snyder still have more than a year to try to pass auto insurance reform before the current two-year session ends. Reform efforts have sputtered for about a decade.
Republicans made changes to the bill before holding a vote that brought at least one former “no” to a “yes,” but the plan failed when Duggan and Leonard could not convince enough Democrats to come on board.
Rep. Ed Canfield, R-Sebewaing, said he changed his mind to vote in support after the GOP modified a fee schedule for hospitals by increasing the proposed cap on reimbursement rates that hospitals treating injured drivers could demand from insurers.
The amendment would have allowed hospitals to charge insurers up to 160 percent of what they charge Medicare, the government health care program for seniors. Canfield said the change was key to bringing him on board because hospitals need to be able to charge commercial rates for commercial services.
The modifications weren’t enough to win more than four Democrats’ support, something Leonard blamed for the defeat. But House Minority Leader Sam Singh, D-East Lansing, dismissed Leonard’s suggestion that Democrats were unwilling to negotiate in good faith, pointing to a separate bipartisan reform package that GOP leadership has criticized.
“To me, there was so many flaws in this bill,” Singh said.
John Truscott, a spokesman for the Coalition to Protect Auto No Fault, said the drive to overhaul auto insurance is far from over.
CPAN is pushing for a separate bipartisan overhaul package sponsored by Rep. John Bizon, R-Battle Creek, and backed by Canfield and 27 other lawmakers, including a slew of Democrats who opposed the Duggan-Leonard plan. But other Republicans have criticized the package that was introduced last month.
“We questioned why they’d run the other package last night when our package is a good compromise that provides real cost reductions,” Truscott said in a Friday email.