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Lansing — Michigan Gov. Gretchen Whitmer said Wednesday she will not be “bullied” into making a deal to reform the state’s no-fault auto insurance amid outside pressure from Detroit businessman Dan Gilbert and other groups.

The East Lansing Democrat said she has made “some progress” in negotiations with Republicans leaders after vowing to veto plans the House and Senate approved two weeks ago.

“But we’re not done,” she said. “Winds can change real fast in this town. I don’t know there’s much to say beyond that.”

Gilbert confirmed this week he is planning to launch a petition drive for auto insurance reform if Whitmer and GOP leaders are unable to hammer out a plan, but his team members also said they remain “hopeful” for a legislative solution.

The state Constitution would allow the Legislature to enact a petition drive plan without Whitmer’s signature, giving her no say in the final law. But Whitmer said the threat won’t influence her negotiations.

“You know what, I’m not going to be bullied into doing something, and I don’t think the Legislature is either,” she said. "I don’t know if that was the intent or not. I’ve certainly had a dialogue with Dan Gilbert. I know he’s frustrated with the lack of movement on this issue. I get that. But the fact of the matter is it’s important that we get this right.”

Whitmer is also facing pressure from a prominent group defending Michigan's no-fault insurance law, which is urging her to stand by her veto pledge rather than “settle” for the GOP reform legislation.

A new billboard displayed blocks from the state Capitol and Whitmer’s office asks the first-term Democrat to “fight for real no-fault reform, not big auto insurance profits.”

It’s one of five billboards erected in Lansing and Detroit paid for by The Coalition Protecting Auto No-Fault,  which includes trial attorneys, consumer and medical groups like the Michigan State Medical Society.

The opposition push comes as Whitmer and GOP leaders negotiate on reforms in an attempt to reduce Michigan auto insurance rates that routinely rank among the highest in the nation. The Legislature could vote as soon as Thursday if a deal is struck.

The House and Senate plans would both end the state’s unique requirement that motorists purchase insurance policies that guarantee unlimited lifetime medical benefits, which they argue are the primary driver of the state’s sky-high rates.

Whitmer signaled last week she is open to giving motorists some choice to buy auto insurance policies with reduced medical coverage, which the industry argues is a predominate cost driver for Michigan rates that routinely rank among the highest in the nation.

The first-term Democrat said a $250,000 medical option is “worth consideration” but made clear she would veto any plan that allows for a full-opt out by motorists with their own health insurance.

But allowing motorists the choice to buy reduced coverage options of any kind would be a “dangerous domino” that would “basically end the Michigan no-fault law,” said coalition counsel George Sinas.

“It’s a horrible idea,” he told reporters Tuesday in a round table meeting near the Michigan Capitol, where he was joined by two auto accident victims. “You cannot have a (personal injury protection) choice system without automatically creating all kinds of new costs. It’s just impossible.”

Whitmer said she understands the concerns and remains focused on “protecting” Michigan consumers.

“My goal is to expand people who have care and to bring down rates for automotive insurance buyers, and I think that’s the center of everything I’m trying to get done here," she said. "I can't expand beyond that at this point."

Michigan is one of 12 states with a no-fault auto insurance law requiring coverage for all drivers, but it is the only one that requires insurers to offer uncapped medical benefits for catastrophically injured motorists.

“It’s clear medical providers and trial lawyers are pulling out all the stops to protect the status quo and block efforts to reform Michigan’s broken, outdated auto no-fault system," Insurance Alliance of Michigan Executive Director Tricia Kinley said in response to the opposition push.

House Republicans contend their plan would save the average motorist between $120 and $1,200 per year, but Sinas argued that it would primarily shift costs to taxpayers and other industries.

The plan would lead to more litigation over accidents involving under-insured drivers, “financial ruin” and bankruptcy for families who buy reduced coverage policies before having an accident and new costs for Medicaid or private insurers, who would get “dunked on” under the legislative proposals, Sinas said.

As written, the proposal appears to reduce coverage guarantees for motorists who were already injured and had purchased policies expecting lifetime benefits, not just in future cases, he said. “That probably is unconstitutional, but if it isn’t, it is fundamentally unfair.”

“Immoral,” added Sam Howell, the son of former state Rep. Jim Howell, who suffered a severe brain injury in a 2005 crash.

Whitmer has met multiple times this week with Republican Senate Majority Leader Mike Shirkey of Clarklake and House Speaker Lee Chatfield of Levering, and those talks continued Wednesday. She also held a Tuesday morning quadrant meeting that included Democratic Senate Minority Leader Jim Ananich of Flint and House Minority Leader Christine Greig of Farmington Hills.

Neither side is saying much about the negotiations besides calling them the most substantive talks on auto insurance reform several years.

"Productive," Chatfield added Wednesday after the Senate had adjourned without taking a vote. 

The governor has pushed for stronger language guaranteeing insurers reduce rates if they are allowed to offer reduced-coverage policies and prohibit them from using non-driving factors to set rates.

They are also discussing “alternative fee schedules” for medical providers, said Shirkey spokeswoman Amber McCann. The Republican proposals would each cap medical charges for auto insurance crash victims at the same level as workers’ compensation,  which providers argue is too low.

Republicans expect to wrap up the talks this week or early next, at which point they'll likely know if a deal is possible. 

“They’re down to just a few items” of negotiation, McCann said. “And those few items would likely just take a few days to decide whether or not they’re going to come to an agreement.”

While Gilbert’s team is preparing a petition drive, “we are also hopeful and optimistic that ongoing, good-faith negotiations between the governor and Legislature will lead to an agreement that delivers real and significant savings for Michigan drivers,” Jared Fleischer, vice president of government affairs for Quicken Loans, said Monday.

Sinas predicted strong resistance if Gilbert moves ahead with a petition drive.

“You’re not going to see a multibillion (dollar) health care economy sit there and say, ‘Gee, you know, I guess Mr. Gilbert’s got this proposal so we’re all cooked,’” Sinas said.

“I don’t think so. I think you’re going to see a massive response. And I wouldn’t be a bit surprised if there were a counter-proposal that the insurance industry really didn’t like.”

Sinas noted that Michigan voters rejected no-fault auto insurance reform ballot initiatives in 1992 and 1994. But GOP lawmakers argue voter sentiment has changed dramatically over the past two decades because of rising premiums.

Kinley said the Insurance Alliance of Michigan is "encouraged" by continuing discussions between Whitmer and legislative leaders.

"We ... urge them to reach a compromise that will lower the cost of auto insurance for drivers throughout the state by cracking down on fraud and abuse, reining-in overcharging by big hospitals and giving drivers a choice," she said. 

Yearly auto insurance premiums in Michigan average $2,693, the highest rate in the nation, according to 2019 rankings compiled by The Zebra, an insurance search engine and industry research firm. Detroit is the easily the most expensive city in the country for auto insurance, with rates more than double the state average.

Auto insurance rates are "unaffordable" by federal standards in 97% of all Michigan ZIP codes, according to a recent analysis by researchers at the University of Michigan. In Detroit, average premiums cost between 12% and 36% of residents' pre-tax income in almost every ZIP code.

Sinas argued Whitmer could help cut rates without reducing medical coverage guarantees by forcing the Department of Insurance and Financial Services to set standards for motorists with coordinated coverage through health insurance, expose rate-making data by the Michigan Catastrophic Claims association and take more aggressive steps to prohibit the use of non-driving factors like ZIP codes and education levels in rate setting.

“Hopefully nobody pushes these nuclear options,” he said of the House and Senate plans. “Nobody needs to. We have laws right now.”

joosting@detroitnews.com

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