D-Insurance isn’t what you think it is
Mayor Mike Duggan and the insurance companies that support his cause are trying to pull the wool over many eyes about the effect his proposed D-Insurance legislation will have on the people of Detroit.
Currently, the Michigan No-Fault Auto Insurance Law guarantees that children who are seriously injured in auto accidents have comprehensive medical coverage for any product, service or accommodation that is “reasonably necessary” for their “care, recovery or rehabilitation.” There is no monetary cap to this coverage and it is available for the entire life of the child for as long as their injury exists. The law provides this coverage to children, even if their parents failed to buy auto insurance.
But under Mayor Duggan’s plan, children whose parents buy D-Insurance will be locked out of the comprehensive medical coverage available to all other children in the state. D-Insurance children will only have $25,000 in coverage for medical treatment necessitated by an auto accident. Moreover, this $25,000 coverage has to be shared with all other family members injured in the same accident.
D-Insurance only provides $250,000 worth of coverage for medical treatment that is “necessary to save the individual’s life or treat life-threatening or permanently disabling injuries until the individual is stabilized.” It does not apply to any expense that is necessary for the person’s actual recovery and rehabilitation.
Detroit families who buy D-Insurance will also be robbed of their right under the Michigan No-Fault Law to choose their own medical providers without having to seek approval from their insurance company. When lives are on the line, families want the best treatment available for their loved ones, but D-Insurance will result in unacceptable delays in essential, time-sensitive care.
This legislation further allows insurance companies to sell this virtually worthless and Draconian insurance coverage with absolutely no guarantee that it will bring down auto insurance rates in Detroit by even a single penny.
Mayor Duggan’s legislation also allows the same type of abysmal insurance coverage to be sold in any other city in Michigan which demonstrates more than 35 percent of its motorists are uninsured. D-Insurance will inevitably spread throughout Michigan and will jeopardize the quality injury coverage Michigan has been proud to provide to catastrophically injured accident victims, especially children.
There is no question that Detroiters need relief from the unfair and unjust auto insurance rates they have no choice but to pay, but D-Insurance is a cut-rate policy that does more harm than good. Insurance companies should work together with the health care community to develop some common sense reforms. There is room for both sides to come together on imposing strong anti-fraud measures, streamlining claims processing, and fair cost-containment measures.
These reforms will reduce costs incurred by insurance companies and likely induce meaningful rate reduction by insurance companies to make coverage more affordable for all while ensuring that Michigan’s seriously injured accident victims have continued access to the quality care they need and deserve.
Dr. Owen Perlman is a specialist in Physical Medicine and Rehabilitation at St. Joseph Mercy Hospital-Ann Arbor.