Bankole Thompson’s Feb. 15 column on Mayor Mike Duggan’s plans to push D-Insurance (“Duggan moving forward with D-Insurance,” Feb. 16) accurately captures the need to reform our broken, outdated auto no-fault system that hasn’t been changed in 43 years.
But he inaccurately states that insurance companies are opposed to reform. Quite the opposite: auto insurance companies have been a strong advocate for fixing Michigan’s broken auto no-fault system.
Recently released data from the National Association of Insurance Commissioners show Michigan residents pay the third highest auto insurance premiums in the country. The situation in Detroit is even more dire, which is why Duggan’s push is so important.
The reason auto insurance is so expensive is Michigan’s one-of-a-kind mandate that forces every driver to purchase unlimited lifetime medical benefits with their auto insurance policy. All other states limit how much medical coverage someone is required to purchase through their car insurance or has no mandate at all. In those states, health insurance covers a person’s medical expenses.
Auto insurance companies have been working for decades to find a solution to rein in the rising cost of auto insurance in the state. Three commonsense reforms supported by the auto insurance industry include:
■Cracking down on insurance fraud by requiring people to provide proof that they were injured in a car accident, such as a police report or information from a doctor on specific injuries.
■ Establishing set rates for what hospitals can charge auto insurance companies for certain procedures to help reduce medical costs and insurance premiums. Auto insurance companies currently pay 200 to 300 percent more than health insurers for the same medical procedure.
■Allowing auto insurance companies to offer plans with different levels of medical benefits, much like a cell phone plan or cable TV package, so people have the flexibility to choose what works best for them and what they can afford.
A 2013 study on the medical costs of no-fault insurance conducted by the Citizens Research Council of Michigan, a non-partisan, independent research organization, found medical providers in Michigan charge more for care related to car accidents than other states — almost 25 percent more. The CRC also found that no check on providers existed to keep them from ordering or charging more for services that may not actually help the patient. No-fault reform would begin to fix that.
Unfortunately, the status quo is extremely lucrative for a number of special interests who routinely lobby against even a smidgen of reform in Lansing.
Auto insurance companies across the state stand with Duggan and look forward to working with him and members of the Legislature to fix a broken system and rein in the high cost of auto insurance in Michigan.
Mark Fisk, spokesperson
Michigan Insurance Coalition