We get a lot of questions regarding the proposed changes to Michigan’s No-Fault Law, so we wanted to highlight, as simply as possible, what Senate Bill 248 would actually do. There is quite a bit of misinformation out there, so we’d like to help clear it up.
The following summary was drafted by the Michigan Association of Insurance Agents.
What does Senate Bill 248, proposed legislation really do?
Moving through the Senate and House Insurance Committee, the language has gone through changes. It’s important to keep in mind that the bill does not impact coverages for the insured, but is designed to cut costs out of premiums because of abuse and overpricing for services. If the bill were passed as is, it would:
• Create a Michigan Automobile Insurance Fraud Authority which would provide resources to law enforcement to aggressively pursue incidents of suspected insurance fraud (suspicious claims amount to $400 million annually).
• Limit attendant care provided by family members to $15/hour (which amounts to over $131,000/year), adjusted for inflation. Family members who are Licensed Medical Professionals are not subject to the limit. A medical review of the patient’s needs and care may be requested if additional care or resources are needed.
• Transition from the existing MCCA (would become the Michigan Legacy Claims Association or MCLA) reimbursement/reinsurance mechanism to a new Michigan Catastrophic Claims Corporation (MCCC) excess insurance mechanism. An auto insurance carrier’s liability would be capped at $545,000, beyond which the claim and liability would transfer to the new MCCC.
• Medical providers would be reimbursed at 150% of Medicare rates which, according to committee comments is anywhere from 20-30% higher than most commercial reimbursement rates.
• Require a $100 per vehicle rate reduction each year for two years.