The Latest on Auto No-Fault - What's In The Bill?
As you may have heard, efforts to fundamentally change Michigan’s auto no-fault system moved through the Michigan Legislature very quickly last week. The resulting legislation – Senate Bill 1 – passed the Michigan House of Representatives by a 94-15 vote and the Michigan Senate 34-4.
How Will This Affect Chiropractic Patients?
Proponents of the legislation say that Senate Bill 1 will provide choice by allowing motorists to purchase different levels of Personal Injury Protection (PIP) coverage, ban nondriving factors such as credit scores in setting insurance rates, and phase in a fee schedule on medical providers.
Our partners at the Coalition Protecting Auto No-Fault (CPAN), however, called the bill a “sell-out of Michigan citizens” and a “total gift to the insurance industry.” In a statement, CPAN President John Cornack said: “As a result of this legislation, thousands of Michigan families will have no choice but to put their family at risk with the low levels of insurance coverages that this legislation now authorizes. Those low-level coverages will be woefully inadequate to provide the necessary medical care that catastrophically injured people, especially children, require in order to have a meaningful quality of life.”
What’s In the Bill?
PIP Choice: Under the bill, Medicare-eligible seniors and those with personal health insurance that covers auto accident injuries would be able to opt out of PIP coverage, reducing that portion of their insurance bill by 100 percent. The other PIP coverage levels (and their mandatory reduction for a period of eight years) outlined in the bill include:
- Unlimited (10 percent average reduction per vehicle on PIP portion of bill)
- $500,000 (20 percent average reduction per vehicle on PIP portion of bill)
- $250,000 (35 percent average reduction per vehicle on PIP portion of bill)
- $50,000 (45 percent average reduction per vehicle on PIP portion of bill)
Fee Schedule: The fee schedule will begin July 1, 2021, and start at 200 percent of Medicare rates for most chiropractors. This would be followed by reductions to 195 percent of Medicare in 2022 and 190 percent of Medicare in 2023. This would apply not just to future claims, but retroactively to existing claims moving forward.
Non-Driving Factors: Proponents of the legislation claim that such factors as gender, marital status, credit scores, homeownership, education level, and occupation will all be banned rating factors under the bill. They also claim that the use of zip codes is also banned, but insurers can still use “territory” as a rating factor, which opponents see as an end run around the prohibition on using zip codes.
Governor Gretchen Whitmer, who was instrumental in negotiating the bipartisan agreement on the bill, is expected to sign the bill, possibly as soon as this week.
The MAC Legal Affairs team and our partners at CPAN continue to examine the exact language in Senate Bill 1 and explore all our options. Stay tuned for more information as it becomes available.