Michigan lawmakers could revisit the state’s auto insurance law next year to improve care for accident survivors and lower rates in high-cost areas, but some fear any changes could raise bills that have fallen since the system was overhauled in 2019.
In the years since changes to Michigan’s no-fault auto system took effect, most Michigan drivers are paying less on average – a recent MarketWatch analysis found that rates have dropped by an average of nearly 18 percent statewide since 2021.
But insurance in Michigan remains among the most expensive in the country, with average annual premiums of $2,140, nearly 22 percent higher than the national average of $1,759.
Detroiters pay even more: an average of $4,726, the second highest in the nation behind New York City, according to a 30 November report by insurance comparison website The Zebra.
Accident survivors and their health care providers, meanwhile, argue that the system is unsustainable, placing too many restrictions on medical costs and cutting the amounts insurers must pay by as much as 45 percent.
The 2019 law, negotiated by Republican legislative leaders and Gov. Gretchen Whitmer, reduced reimbursement rates for medical providers as part of a larger attempt to reduce the cost of auto insurance premiums. The law also allows drivers to choose lower levels of personal injury protection, providing an alternative to the previously mandatory lifetime care guarantee.
Advocates scored a victory in July when the Michigan Supreme Court ruled that the law didn’t apply to people injured before the law was passed in 2019, and the Senate approved legislation in mid-October that would extend similar protections to future accident victims.
The two-bill package, which would increase reimbursement rates for medical providers who care for seriously injured motorists and lift a 56-hour-per-week cap on payments for care provided by family members, received bipartisan support in the Senate.
But the measure was opposed by Whitmer’s administration and several Republicans who helped write the existing law.
Senate Minority Leader Aric Nesbitt, R-Porter Township, said in a floor speech that “a vote for these bills is a vote for higher auto insurance rates in Michigan”.
Rep. Brenda Carter, a Detroit Democrat who chairs the House Insurance and Financial Services Committee to which the bills were sent, agrees.
The Senate legislation “would turn back the clock on reform and increase costs,” Carter told Bridge Michigan, adding that she believes it’s “not a vehicle for a solution.
“We need to be careful about drafting legislation for such a complicated system,” she said.
“We need a narrow solution to address this small segment of benefit payments without raising rates for those who can least afford it. We also need to look at more ways to reduce costs within the system.”
Care providers who support the Senate bills argue that the plan put forward is already a narrow – and necessary – fix that wouldn’t affect drivers’ ability to buy lower-cost premiums.
Tom Judd, executive director of the Michigan Brain Injury Provider Council, called Carter’s stance on the Senate-passed bills “disappointing,” but remained optimistic that the House could reach a deal that improves care options for accident survivors.
“We hope that Speaker Carter will reconsider this unilateral decision, listen to her committee members and colleagues, and allow a fair hearing and vote in her committee before slamming the door on the solutions contained in the Senate bill package,” he said.
Both Carter and House Speaker Joe Tate, D-Detroit, acknowledged that more could be done to lower the price of auto insurance in Michigan.
“I have a lot of members who have a strong appetite for how we look at auto no-fault … to be able to make that policy better,” Tate told reporters before the Legislature adjourned for the year. “What we don’t want to do is have something that might be unsustainable.”
Carter said the reform has made a difference, pointing to data from the Insurance Alliance of Michigan showing more than 200,000 Michigan drivers have purchased auto insurance since the changes took effect in 2020, but said more choices for drivers to choose their level of coverage would be a way to help lower rates in Detroit.
Rep. Julie Rogers, a Kalamazoo Democrat and physical therapist who has long advocated for revisiting the 2019 law, said she sees no reason lawmakers can’t tackle lowering costs and addressing health care concerns at the same time, but sees the latter as a “life and death” issue that lawmakers shouldn’t put off.
“There is a majority of lawmakers in the House who want to see some kind of significant fix,” she said.
