Wednesday, December 3, 2014
Contact your state legislator and let them know how you feel about keeping the Auto No-Fault system intact and if you want to continue to have auto no-fault benefits, no one is grandfathered in. Here is a link, it only takes a minute: http://www.house.mi.gov/mhrpublic/
The New Front In Auto Insurance Fight: Assigned Claims
Some familiar enemies are digging in for a lame-duck fight this month over a bill that would set standards for individuals without no-fault auto insurance to receive no-fault medical benefits from the Michigan assigned claims program.
The program, now known as the Michigan Assigned Claims Plan (MACP), dates back to the 1970s. The program's goal is to provide help to people who are severely injured in car accidents where through no fault of the injured individuals, no auto insurance is available to provide no-fault benefits.
For example, the program could help a pedestrian without auto insurance who was struck by a car driven by someone else without insurance. Another example could be the case of someone who was a passenger in a vehicle that wasn't covered but the passenger was injured.
In 2013, the MACP, formerly known as the assigned claims facility, received about 3,400 new claims. Claims are assigned to insurance companies who treat them like claims involving regular policies, but under the MACP, the cost of paying the claims -- about $227 million in the 2013 billing year -- is divvied up among insurers in the state.
The problem, according to those who support reforming the system, is that the cost of the program has increased by about 400 percent from $58 million over 13 years.
That's where
HB 5854, sponsored by Rep. Pete LUND (R-Shelby Twp.) enters. The House Insurance Committee, which Lund chairs, is scheduled to consider the bill on Wednesday. Supporters of reform say the bill is necessary because there needs to be processes inserted in statute, similar to what's in a normal auto insurance policy, to determine who should get benefits and how someone must go about receiving those benefits. Without those processes, fraud and abuse can happen, they say.
Those new “hurdles,” however, have inspired opposition.
Opponents say the bill could block some injured people from getting benefits although the injured individuals deserve them. Opponents also argue that the bill is an attempt to make a more palatable reform to no-fault insurance while the larger reform effort has been stalled in the Legislature.
The Coalition Protecting Auto No-Fault (CPAN) doesn't like Lund's bill while insurance companies and supporters of larger efforts to bring down auto insurance costs do.
“When you buy insurance you create a contract between you and the insurance company,” Lund said last week. “That contract lays out everything that the insurance company is expected to do and that you're expected to do.
“There is nothing like that for the assigned claims facility because there is no contract.”
But George SINAS, general counsel for CPAN, said Lund's bill sets up a “minefield” for individuals who want to receive help from the MACP.
“It takes this class of people who get their benefits from the assigned claims facility and it treats them entirely differently than how the rest of us are treated,” Sinas, said last week. “There is absolutely no similarity to what you and I have to do to what these people will have to do.”
In a lengthy analysis of the bill, Sinas wrote that the bill would make eligibility for no-fault benefits under the MACP dependent upon whether a person can “demonstrate after exercising due diligence” that he or she is entitled. That's instead of simply being qualified for benefits, he said.
Also, the bill, Sinas wrote, institutes a one-year statute of limitations for claims and makes eligibility for benefits contingent upon a person filling out an official form from the Michigan Automobile Insurance Placement Facility, which managed the assigned claims plan.
Supporters of the bill describe it as merely “cleanup legislation” designed to fix flaws in state law.
They've mentioned examples of problems with the current system including medical providers submitting claims that simply appeared to be auto-related or claims in instances where there was no true evidence an accident every occurred.
“It appears to me that this has been ripe for abuse,” said Tom SHIELDS, spokesperson for the Michigan Insurance Coalition.
“The hurdles that are being put in place are the exact same hurdles that have to be followed by a person filing a traditional no-fault claim,” Shields added.
The Secretary of State managed the assigned claims program until December 2012 when it moved to the Michigan Automobile Insurance Placement Facility (MAIPF), which was created to guarantee that auto insurance is available to people who are unable to obtain automobile insurance in the competitive market.
Terri MILLER, executive director of the MAIPF, said Lund's bill corrects items in state law that are causing much litigation surrounding assigned claims.
In normal auto insurance claims, companies have agreed-to policies to fall back on, she said.
“We don't have a policy in assigned claims so the statute needs to be very specific because we don't have that policy language to fall back on,” she said.
The program is there to provide benefits to individuals who are injured in accidents and are statutorily entitled, she said, but it's created a “cottage industry” for payments going to individuals who may not have been entitled.
“We're just trying to reduce the amount of our benefit costs that are charged to insurance buyers in Michigan,” she said, “by being more diligent about investigating all of the claims properly and making sure that everyone that we approve for payment is entitled to benefits.”
At 8:15 tomorrow morning, the House Insurance Committee will meet to take up a number of bills including HB 5854. The bill is expected to be reported out of the committee onto the floor. While I would not discourage anyone from attending tomorrow’s meeting, I think a better use of your time will be to contact your House member expressing strong concerns with the bill. CPAN opposes it. The future of the bill in the House is uncertain but I hope we can continue to keep the Democrats and those House Republican’s that have stayed strong on ANF issues to remain in opposition. Please contact by phone or email. Ask them their position on the bill. Remember, this is lame duck, where many deals are made to move unrelated issues despite the policy or politics. We are working to keep HB 5854 on the House calendar where it will die when the legislature adjourns for the session on Dec. 18th.
Here is a link to contact your state legislator, do it NOW:
