Gov. Gretchen Whitmer on Tuesday defended a pending overhaul of Michigan’s auto insurance law, saying treatment for injured drivers will “still be there” if they forego what has been a one-of-its-kind, mandatory unlimited personal injury protection benefit.
The Democrat, who will sign the legislation as soon as this week, told The Associated Press she fought to ensure that all motorists buying car insurance have coverage — whether it is through their auto insurer or a private- or government-provided plan. Asked about criticism that severely injured people will no longer have gold-plated treatment because their regular health insurance will impose caps on rehabilitation visits and other services, Whitmer said medical providers may have to deliver care “in different mechanisms but it will still be there, and I think that’s a good thing.”
She said the Republican-backed bills as initially proposed and a ballot initiative threatened by Detroit businessman Dan Gilbert “would have been devastating. This is a result where we can shore up the safety net.”
Michigan — home to the country’s highest car premiums — is the only state to require unlimited personal injury protection, or PIP, benefits, which on average make up half of auto premiums. They cover medical treatment, rehabilitation expenses, lost wages for three years and up to $20 daily for assistance with things like cooking, cleaning and other services people can no longer carry out due to their injuries.
Under the measure, starting in mid-2020 people will be able to forego PIP entirely if they have health insurance such as an employer plan or Medicare. Other options will include sticking with unlimited coverage or choosing either $250,000 or $500,000 worth. Those on Medicaid will have to carry at least $50,000 in PIP.
The measure won overwhelmingly bipartisan support from the Republican-led Legislature on Friday.
Speaking by phone from the Detroit Regional Chamber’s Mackinac Policy Conference, Whitmer said the legislation originally would have been “devastating” to hospitals with trauma centers. It would have cut reimbursements to workers’ compensation levels, while the bill heading to her desk would require that providers be paid at roughly 200 percent of the Medicare fee schedule.
“It’s not just emergency rooms for people with auto injuries,” she said. “It’s losing access for any parent who’s got an asthmatic child who has gone to the ER because their child is having a hard time breathing or had a contusion. It would have been a lack of care for people that have a heart attack. When these trauma centers are at risk like this, every single one of us loses that access.”
Unlike several other no-fault states, hospitals, doctors and rehab facilities treating crash victims have effectively been able to charge auto insurers far more than they do for patients covered by private or government health plans.
Whitmer added that PIP rates will be cut for eight years under the pending law, calling it “real relief for consumers.” She said the new law will require “quite a bit” of public education, because “it’s a very complicated system that we are trying to address in a very thoughtful way.”
The landmark deal left Whitmer optimistic about the potential for confronting other major issues such as deteriorating roads, which she has proposed fixing with a 45-cents-a-gallon fuel tax increase. She said she and the four legislative leaders — two Republicans and two Democrats — “got more done in the first five months of this year than has been done on this issue in the last five years.”