LANSING – The effort to end lifetime benefits for those severely injured in an automotive accident took its first big step forward Thursday under legislation the House Insurance Committee reported that makes major changes to the state’s auto no-fault system.

With the end of unlimited coverage for catastrophic care, motorists could choose from coverage limits of $500,000, $1 million and $5 million, under HB 4936 .

During the hearing, the H-1 substitute was approved with three amendments.

The Republican amendments removed restrictions on motorcyclists’ ability to sue for damages, struck language regarding the definition of pain and suffering, and exempted ambulance companies providing emergency services from the workers’ compensation fee schedule.

A huge crowd gathered for the fourth and final day of testimony. Two additional overflow rooms were opened on the third floor of the House Office Building, in addition to the committee room and an overflow room on the fifth floor.

Rep. Andrew Kandrevas (D-Southgate), the minority vice chair, asked the substitute not be voted on because his members received the 42-page bill about an hour and a half before the meeting started.

He said those who previously testified may have a different opinion based on the changes in the substitute and amendments and he wanted to hear their thoughts. He also said there were other people who had not had a chance to testify.

But voting proceeded, and bill was approved by a vote of 9-7 with two Republicans – Rep. Mike Callton of Nashville and Rep. Joel Johnson of Clare – voting no.

Rep. Ken Yonker (R-Caledonia) was viewed by many as the swing vote on the panel and those packed into the hearing room reacted audibly when he voted yes.

“That was where I put myself: Hey, that’s part of the job,” he said.

Yonker said he reached an understanding with Rep. Pete Lund (R-Shelby Township), the committee chair and bill sponsor, to receive more information from the two sides that he didn’t get during the committee process.

He said opponents of the bill say the workers’ compensation fee schedule is not sufficient, so he has asked them to provide him with something they could agree upon and that hasn’t happened.

“At this point, I’m at a dead end,” he said.

Yonker said it’s likely at least one substitute, if not more, will emerge before it reaches the floor.

“We have a long way to go,” he said.

One source following the issue said House Speaker Jase Bolger (R-Marshall) got personally involved in the bill to win the committee votes and that the elimination of the $250,000 coverage option was key for Mr. Yonker and Rep. Ben Glardon (R-Owosso).

There were four Democratic amendments. All were rejected.

They dealt with the pay for in-home care workers, adding more transparency to the Michigan Catastrophic Claims Association board, making sure medical providers were reimbursed in a timely fashion and removing the $50,000 appropriation in the bill that would make it referendum-proof.

Prior to the final vote, the panel heard testimony from Office of Financial and Insurance Regulation Commissioner Kevin Clinton, who supports the bill.

He said if the MCCA was an insurance company, OFIR would be shutting it down, because it is insolvent.

Clinton said the current system is going to implode.

He said the MCCA relies on future investment income to pay its claims and right now assumes it will earn 7.6 percent on vested assets in the long run.

“What if they’re wrong?” he said.

If it earns half that, it would mean a tax on future drivers of $1,400 per car, he said.

Opponents of the bill said they were not willing to just trust the insurance industry that those numbers are correct and John Cornack, president of the Coalition to Protect Auto No-Fault, filed a Freedom of Information Act request seeking information on claims data from the MCCA.

Clinton also tried to assure members of the panel that insurance companies will reduce their rates to customers, even though it is not required in the bill.

“The competitive marketplace should result in lower rates, and if it doesn’t, OFIR stands ready, willing and able to step in to make sure it does happen,” Clinton said.

Rep. Roy Schmidt (D-Grand Rapids) said his concern remained about those who would choose the minimum level of coverage and then be unable to afford treatment for injuries that are well above $500,000.

Clinton said he is concerned about that as well, but people can use their health insurance, go on Medicaid, Medicare, or Social Security, or they can sue people. He said that is the way it works in the other 49 states.

“That’s not a good answer,” Schmidt said.

Rep. Kate Segal (D-Battle Creek) agreed.

“Basically, we’re telling middle class families throughout the state now that if you actually are injured in a catastrophic accident, you’re going to have to spend down to poverty levels to qualify for Medicaid to get the benefits that you would have had under no-fault,” Segal said.

Clinton said people can sign up for up to $5 million of coverage and that takes care of almost everyone.

“The fee schedule will make that $5 million last a lot longer than it does today,” Clinton said. “I think this is a fair compromise.”

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

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