LANSING – After adopting amendments making significant changes, rejecting 16 Democratic amendments, hearing an emotional personal story for one legislator and seeing heated debate between opponents and proponents of a bill drastically changing the state’s auto insurance laws, the Senate voted 21-17 to send a largely revised bill to the House.
When a Senate panel reported a revamped version of SB 248 to the full Senate, it had four key provisions: establishing a new association to handle claims for catastrophic injuries, limiting attendant care payments, creating an auto insurance fraud authority and reimbursing health care providers under the same payment schedule as the workers’ compensation system.
The pay limits for attendant care and workers’ compensation-level reimbursements had opponents to the bill especially upset, but all of that changed on Thursday when the Senate again revamped the bill in an S-3 substitute adopted on General Orders. The primary change in the substitute regarded the workers’ compensation fee schedule, which was dropped and replaced with more generic language saying insurers would not be obligated to pay a provider more than that provider charges insurers for similar services, exempting Medicare and Medicaid reimbursements rates from factoring into that payment.
The rest of the changes – and they were significant – came in the form of five amendments sponsored by varying Senate Republicans, added without discussion onto the substitute during General Orders, leaving Democrats, the press and others in attendance in a fog. The first, by the bill sponsor himself, Sen. Joe Hune (R-Whitmore Lake), clarified language already in the bill regarding one’s ability to seek greater reimbursement for attendant care.
Following that was an amendment by Sen. Mike Shirkey (R-Clarklake) ensuring that members or self-insurers paying for the costs and administration of the Fraud Authority did not do so with premium revenues. That was followed by an amendment from Sen. Ken Horn (R-Frankenmuth) – previously critical of how quickly the bill moved and thus abstaining from voting on reporting it from committee – allowing an injured person or his or her representative to request a medical review to determine care and treatment requirements, and if that review exceeded the limitations of reimbursement, making those payments allowable.
Shirkey followed with another amendment subjecting the Fraud Authority to the Freedom of Information Act, and Sen. Dave Robertson (R-Grand Blanc) rounded out the changes from Republicans by removing a provision requiring injured persons receiving attendant care to pay a co-payment after the first 30 days of treatment of 20 percent up to a maximum of $200 a month.
But the story was much different when, on Third Reading, Democrats offered 17 amendments (though one was withdrawn) to no avail, including some whose content – such as striking out the fee schedule – were similar in nature to the changes Republicans had inserted on the floor.
Sen. Coleman Young II (D-Detroit) offered six different amendments related to encouraging the insurance industry to reduce rates by a certain percentage in the first year that the bill is effective. By his last proposal, he was defeated.
“I can’t even get a 5 percent reduction?” he said. “Are you serious? This is outlandish. We ought to be ashamed of ourselves.”
Asked after session about ensuring savings, Hune said he did not anticipate a scenario in which consumers wouldn’t save if the changes passed in the bill were enacted into law, though he could not immediately quantify how much savings might occur.
Asked if he would revisit the issue if, in a couple of years, the rates didn’t decline, Hune responded, “My gosh, I’d love (to)!”
When it came to final passage, Sen. Virgil Smith (D-Detroit), Sen. Bert Johnson (D-Highland Park) and Hune debated back and forth in statements, one attacking a point the other had made. Smith would end up being the only Democrat in support of the bill, as not only had he won an amendment in committee defining excessive or inadequate rates, but many of the provisions that came to be in the bill were things he had previously told Gongwer News Service he was working on in his own bill.
Sen. Rick Jones (R-Grand Ledge) broke up the dialogue a bit when he took to the podium to make a brief comment that, while he supported this legislation, he felt a cap on benefits was still necessary.
Indeed, if there is one major victory for opponents of changing the current law, it is that the bill does not include any sort of cap on medical benefits – a decades-long priority for insurers.
The debate reignited, at least between Smith and Johnson, and then Sen. Rebekah Warren (D-Ann Arbor) buzzed in with her own statement that brought the chamber to complete silence. She took to the podium, a noticeable and uncharacteristic shake in her voice and struggling to keep her words together, and told a story about her older sister, who, more than 30 years ago, was in a vehicle broadsided by a semi-truck and the critical role the state’s insurance system played in her recovery from devastating injuries.
“My sister was in a coma for more than four months. She had injuries that were, you almost couldn’t list the number of injuries she had, the number of doctors she had to see…the imprint of the semi-truck was on the side of her face when I saw her for the first time,” Warren said.
“She stayed at a nursing home. She went to a rehabilitation center, and it took five years to put her life back together, but because of no-fault, my parents didn’t have to sit there and worry – do they have to sue somebody to get her coverage of her medical needs?” she said. “They didn’t have to worry that her bills were going to be paid. All they had to worry about was how to take care of their three other daughters while their oldest clung to her life.”
To those who say the bill is reasonable because it does not cap medical benefits, Warren said, “The cracks that start today undermine the system forever.”
SB 248 was then passed on a 21-17 vote, with all Democrats except Smith in opposition, joined by Republicans Sen. Mike Green of Mayville, Sen. Marty Knollenberg of Troy, Senate Majority Floor Leader Mike Kowall of White Lake, Sen. Peter MacGregor of Rockford, Sen. Tory Rocca of Sterling Heights, Sen. Wayne Schmidt of Traverse City and Sen. Dale Zorn of Ida.
Also included in the bill is an appropriation of $150,000 for implementation purposes, though opponents of the measure allege that was likely done to make the bill referendum-proof (the Supreme Court has ruled that a bill containing an appropriation, no matter how small, makes it immune from referendum).
Pressed on the issue, Hune and Senate Majority Leader Arlan Meekhof (R-West Olive) say that money will go toward, in part, educating the public on the new changes. Hune said it will also likely go toward another full-time employee, maybe more, at the Department of Insurance and Financial Services to help implement the changes.
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