Health advocates, lawmakers attack no-fault reforms

Karen Bouffard
The Detroit News

Royal Oak — Nearly 200 health advocates, accident victims and lawmakers gathered at Beaumont Hospital in Royal Oak Monday to protest proposed changes to Michigan’s no fault auto insurance law as “misguided” and “cynical.”

Leading a succession of speakers was Oakland County Executive L. Brooks Patterson, who said fast-moving legislation that advanced out of the House Insurance Committee last week would undo lifetime health benefits for auto accident victims that make Michigan’s no-fault insurance law a model for the nation.

“We have a train that’s racing through the Legislature and we need to stop it,” Patterson said. “We have not had a chance to really look at this bill.”

Michigan’s 40-year-old no-fault law created the Michigan Catastrophic Claims Association, which reimburses auto insurance companies for accident victims’ medical benefits in excess of $545,000. Funding comes from an assessment paid by auto insurers, which is usually passed on to drivers. The association sets the amount of the annual assessment, which drops from $186 to $150 per driver on July 1.

Changes to the no-fault system long have been sought by insurers and businesses, who say its rising costs are unsustainable and are making Michigan's auto insurance prices uncompetitive.

Patterson said supporters of the legislation want to tap into a $20 billion surplus in the catastrophic claims fund to use the money for other needs, such as fixing Michigan’s roads. The outspoken executive, who uses a wheelchair since being injured in an auto accident two years ago, said his medical care is covered by workers’ compensation, rather than the Michigan Catastrophic Claims Association, because he was working at the time of his accident.

Patterson noted the House-amended bill includes a $150,000 appropriation, which under the state constitution would render it ineligible to be overturned in a public referendum.

“It’s cynical to put something like that into the law ... that removes it from referendum,” Patterson said. “It’s legal, but it’s mean spirited.”

The final version of the bill package contained changes from Senate-approved legislation to blunt some criticism, but they didn't appear to appease opponents.

Committee-passed revisions include a two-year, $100-per-vehicle insurance rate rollback and reimbursement for medical treatment of crash injuries at 150 percent of the federal Medicare rate. Dr. Robert Takla, chief of the Department of Emergency Medicine at St. John Hospital and Medical Center, said basing reimbursement on the Medicare rate will not cover the needs of accident victims.

But supporters disagree.

“These common-sense reforms seek medical cost controls commonly found in every other health care delivery system,” said Pete Kuhnmuench, executive director of the Insurance Institute of Michigan.

“The proposed medical fee schedule would prohibit the overcharging of health care providers presently allowed under the state's no-fault insurance statute. The proposal to allow auto insurers to pay 150 percent of Medicare would exceed the amounts accepted by health facilities from other payers, including Medicare, Medicaid and workers’ compensation.”

The legislation still contains limits on payment for the in-home care many crash injury victims must have, often around the clock. Opponents argue such limits don't consider the unique needs of each patient and will compromise the care they receive.

Andy Thompson, 33, of Washington Township was among more than a dozen accident victims showing their opposition to the proposed changes. He was hospitalized for 140 days after being thrown from a vehicle in an auto accident and was completely paralyzed. Due to therapy paid for by the Catastrophic Claims Association, he’s recovered movement in much of his upper body.

“When I was in the hospital I could not feed myself or hold my daughter,” Thompson said. “(Without current no-fault benefits), I would not have been able to afford rehabilitation or the aid services that help me at home.”