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GOP touts 'productive' auto insurance talks but Whitmer ‘draws the line’ on medical opt-out

Jonathan Oosting
The Detroit News
Michigan Gov. Gretchen Whitmer meets with Angela and Ryne Weber at  Hope Network Neuro Rehab in East Lansing.

Lansing — Democratic Gov. Gretchen Whitmer signaled Thursday she is open to giving motorists some choice in auto insurance medical coverage levels but said she will “draw the line” and veto any plan that includes a full-opt out for drivers with health insurance.

Whitmer’s potential support for a $250,000 coverage option, as opposed to the uncapped lifetime personal injury protection currently mandated under state law, buoyed Republican leaders attempting to drive down sky-high auto insurance rates.

Senate Majority Leader Mike Shirkey and House Speaker Lee Chatfield had hoped to finalize a plan by Thursday after their chambers approved separate proposals last week but will instead continue what they called “productive” negotiations with the Whitmer administration through the weekend.

“I’m convinced we’re going to get it done one way or another,” Shirkey, R-Clarklake, told reporters Thursday afternoon. The House and Senate do not meet Friday or Monday.

Michigan is the only state in the nation that requires unlimited medical coverage through auto insurance policies, and Republicans contend that mandate is the primary cost driver for rates that routinely rank among the highest in the nation.

The House plan would require insurers to continue offering unlimited coverage but also allow motorists to purchase plans with $500,000, $250,000 or $50,000 in personal injury protection — or opt out entirely if they have public or private health insurance.

A $250,000 option is “worth consideration,” Whitmer said Thursday morning.

“The zero-coverage option is where I have to draw the line, because that’s what really shifts the cost on taxpayers or bankrupts people and undermines the critical health care that we have across the state,” she said.

The East Lansing Democrat spoke with reporters after touring a Hope Network Nuero Rehabilitation facility in East Lansing, one of four campuses the Christian nonprofit operates to help patients with severe brain or spinal injuries relearn basic activities of daily living, including eating, walking and bathroom usage.

“I understand the desire to bring down rates for people, I absolutely do, but my fear is that the move to do so with a zero coverage option is going to undermine the health care system for every single one of us, not just for the people injured in auto accidents," Whitmer said after the tour.

Republicans argue that allowing motorists who have health insurance to opt out of medical coverage in their auto policy would avoid duplicative coverage, but Democrats and health officials contend the access to medical care would not be comparable. 

“I don’t understand the logic or the philosophy by always drawing lines in the sand in every step of a negotiation,” Shirkey said in response to the governor's comments. “So I’m not going to get into that, but I will acknowledge the fact that she’s moving in the right direction.”

Shirkey said the Whitmer administration has also shown some willingness to consider “cost control elements” for medical providers.

Both the House and Senate plans include a mandated “fee schedule” that would cap medical charges for auto insurers at the same rate as workers compensation, which medical providers argue is too aggressive.

Whitmer met Monday with Shirkey and Tuesday with Chatfield. Negotiations have continued at the staff level throughout the week.

“We are committed to working with this administration, because this is the single largest issue facing our state," said Chatfield, R-Levering. "People are fed up with paying the highest car insurance rates in the country."

House Republicans say their “landmark” proposal could save motorists between $120 and $1,200 on average, but Democrats have questioned the language, suggesting insurers could simply raise collision premiums if they are forced to reduce personal injury protection costs.

Whitmer has made clear she would veto the House and Senate proposals if either reached her desk without significant changes. She’s also pushing for tighter language to ensure costs savings and prohibit insurers from using non-driving factors like ZIP codes or credit scores to set rates.

“I think that we can make those better, and I’ve gotten the sense that there’s a willingness to improve those,” Whitmer said.

During the governor’s visit, Hope Network officials said that both the House and Senate plan could force them to make significant layoffs and reduce patient services. They expect most motorists would choose the cheapest auto insurance plan they could purchase, especially low-income drivers who already qualify for Medicaid and could instead rely on that coverage.

Medicare does not cover the rehab services Hope Network provides, Medicaid has a limited waiver that only covered two patients last year and private health insurance plans only cover transitional services, not longer-term care, said Margaret Kroese, vice president of Neuro Rehabilitation.

The GOP plans would “have a huge impact” on Hope Network, Kroese said. “Many of the people that come to us will have a little bit of health insurance coverage left for a bit of outpatient therapy, but that’s the extent of it when it comes to health insurance.”

Whitmer visited multiple patients at the facility, including 26-year-old Angela Weber, who was struck by a car while riding her bike home from work at Michigan State University, where she worked as a clinical coordinator in the psychology department.

Eight months after the crash, Weber has graduated from a wheelchair to a walker. Therapists helped her retrain her throat to be able to eat solid foods again.

“If I didn’t have access to this therapy, I probably still wouldn’t have a chance to live my life,” Weber told the governor.

Hope Network officials said that without the services they provided under auto insurance, a patient like Weber would likely end up living the rest of her life in a nursing home.

Whitmer said the issue is personal for her. Her daughter was hit by a driver who ran a red light last week, but was “fortunately” uninjured. She also visited the son of deputy state budget director Kyle Jen, who was struck by a car while walking and is rehabbing at Hope Network.

“No one thinks this could happen to them, but when it does, they want to know that they’ve got the care that they’re going to need to be independent and productive again,” Whitmer said. “And that’s what’s happening here at Hope Network, and that’s I think what’s in jeopardy.”

Asked about the potential for a quick deal, Whitmer said Republicans had months of internal debate but “only just engaged with me, and the executive office, and the Democrats in the Legislature" on Monday. 

"This is an incredibly enormous policy change that we're contemplating," she said. "It needs to be robustly contemplated and thought out." 

House Republicans argue their proposed fee schedule for medical providers would prevent "widespread abuse and patients being forced to pay three or four times what a medical service actually costs." 

But the Michigan Health & Hospital Association estimates the government mandate could cost Level 1 and Level 2 trauma centers a combined $325 million a year. There are 41 such facilities in Michigan, including pediatric specialty centers.

Whitmer said she is also concerned about the impact on in-home attendance care services for car crash victims and cost shifts to Medicaid.

The Senate Fiscal Agency projects the House plan — like the Senate version — could cost the state about $65.9 million in additional yearly Medicaid costs by 2029, according to projections 

If drivers are “less interested in unlimited” personal injury protection, “then the increase in Medicaid costs would be greater,” the agency said in a recent analysis. 

House Democrats proposed their own plan Thursday that would require insurance companies to cut individual bills by 40% and ban the use of non-driving factors such as zip code, gender or marital status. The legislation would keep full  personal injury protection but exempt seniors with Medicaid or lifetime retirement health care.

House Minority Leader Christine Greig said she hopes the proposal will result in negotiations and ideas that could be the platform for compromise. The Farmington Hills Democrat said the rushed process that led to the Senate and House bills was a “sham.”

“This has always been about coming together,” Greig said.

Chatfield had not seen the full Democratic proposal but said from what he’s heard it is “not a real plan” because it does not include personal injury protection choice for all drivers or a fee schedule to cap medical costs.

“You can't simply put a wizard hat on and wave a wand across the state of Michigan and sprinkle fairly dust and expect that car insurance rates are going to drop,” Chatfield said.

Beth LeBlanc contributed.