Home Insurance Whitmer ‘draws the line’ on car insurance medical opt-out – The Detroit News

Whitmer ‘draws the line’ on car insurance medical opt-out – The Detroit News

16 min read

Lansing — Michigan Gov. Gretchen Whitmer said Thursday she will not sign any auto insurance reform plan that allows drivers to fully opt out of medical coverage, her clearest directive yet amid ongoing negotiations with Republican legislative leaders.

The GOP-led House and Senate approved separate no-fault auto insurance proposals last week that would end the state’s unique requirement for motorists to purchase policies with guaranteed lifetime medical coverage in the event of a catastrophic crash.

Both plans seek to drive down Michigan’s sky-high rates by allowing motorists the choice to purchase reduced coverage plans, including those with no personal injury protection for drivers who already have public or private health insurance. The Republican majority could act on either plan at any point, but action appeared unlikely later Thursday.  

“The zero-coverage option is where I have to draw the line, because that’s what really shifts the cost on taxpayers or bankrupts people and undermines the critical health care that we have across the state,” Whitmer said.

The East Lansing Democrat spoke with reporters after touring a Hope Network Nuero Rehabilitation facility in East Lansing, one of four campuses the Christian nonprofit operates to help patients with severe brain or spinal injuries relearn basic activities of daily living, including eating, walking and bathroom usage.

Whitmer signaled she would be willing to consider allowing motorists some choice in the level of personal injury protection they purchase, suggesting the $250,000 option “is worth consideration.” Michigan is currently the only state that mandates unlimited lifetime coverage.

“I understand the desire to bring down rates for people, I absolutely do, but my fear is that the move to do so with a zero coverage option is going to undermine the health care system for every single one of us, not just for the people injured in auto accidents,” the governor said.

Republicans contend that allowing motorists who have health insurance to opt out of medical coverage in their auto policy would avoid duplicative coverage, but Democrats contend the access to medical care would not be comparable. 

Senate Majority Leader Mike Shirkey, R-Clarklake, would be “very reluctant to say that we’re not willing to give every person in Michigan the opportunity to fully opt out and fully realize as much savings as possible on car insurance,” said spokeswoman Amber McCann. 

 The House plan, which the Senate is considering, would allow motorists to buy reduced coverage policies but require insurers to reduce personal injury protection premium rates for five years.

Insurers could also sell plans with $500,000, $250,000 or $50,000 in personal injury protection. Like the Senate version, consumers with private or public health insurance that covers auto crash injuries could opt out of the medical coverage all together.

House Republicans say the “landmark” proposal could save motorists between $120 and $1,200 on average, chopping auto insurance rates that routinely rank among the most expensive in the nation.

But Hope Network officials say the auto insurance coverage caps proposed by Republican lawmakers could force them to make significant layoffs and reduce patient services.

Medicare does not cover the rehab services Hope Network provides, Medicaid has a limited waiver that only covered two patients last year and private health insurance plans only cover transitional services, not longer-term care, said Margaret Kroese, vice president of Neuro Rehabilitation.

The House and Senate plans would “have a huge impact” on Hope Network, Kroese said. “Many of the people that come to us will have a little bit of health insurance coverage left for a bit of outpatient therapy, but that’s the extent of it when it comes to health insurance.”

Whitmer visited multiple patients, including 26-year-old Angela Weber, who was struck by a car while riding her bike home from work at Michigan State University, where she worked as a clinical coordinator in the psychology department.

Eight months after the crash, Weber has graduated from a wheelchair to a walker. She had to retrain her throat to be able to eat solid foods again.

“If I didn’t have access to this therapy, I probably still wouldn’t have a chance to live my life,” Weber told the governor.

Hope Network officials said that without the services they provided under auto insurance, Weber would have likely ended up living the rest of her life in a nursing home.

Whitmer said the issue is personal for her. Her daughter was hit by a driver who ran a red light last week, but was “fortunately” uninjured. She also visited the son of deputy state budget director Kyle Jen, who was struck by a car while walking and is rehabbing at Hope Network.

“No one thinks this could happen to them, but when it does, they want to know that they’ve got the care that they’re going to need to be independent and productive again,” Whitmer said. “And that’s what’s happening here at Hope Network, and that’s I think what’s in jeopardy.”

Whitmer has already made clear she would veto the House and Senate proposals if they reach her desk without significant changes. She’s also pushing for tighter language to ensure costs savings and prohibit insurers from using non-driving factors like ZIP codes or credit scores to set rates.

“I think that we can make those better, and I’ve gotten the sense that there’s a willingness to improve those,” Whitmer said.

Whitmer met Monday with Shirkey and Tuesday with House Speaker Lee Chatfield, R-Levering. Staff-level negotiations were expected to continue through Thursday and will “help them decide if they need to schedule additional meetings over the weekend or not,” McCann said. 

While Shirkey wants to maintain the medical opt-out option, “I think the fact the governor has put out some options and is publicly stating what she is interested in pursuing is always a good sign, and we take that as part of the good negotiating process,” McCann said. 

Asked about the potential for a quick deal, Whitmer said Republicans had months of internal debate but “only just engaged with me, and the executive office, and the Democrats in the Legislature” on Monday. 

“This is a incredibly enormous policy change that we’re contemplating,” she said. “It needs to be robustly contemplated and thought out.” 

The House plan would also mandate a fee schedule for medical providers, which House Republicans argue will prevent “widespread abuse and patients being forced to pay three or four times what a medical service actually costs.” 

Health care officials deny price gouging claims and expect most motorists would choose the cheapest auto insurance plan they could purchase, especially low-income drivers who already qualify for Medicaid and could instead rely on that coverage.

The Michigan Health & Hospital Association estimates the government-mandated fee schedule could cost Level 1 and Level 2 trauma centers a combined $325 million a year. There are 41 such facilities in Michigan, including pediatric specialty centers.

Whitmer said she is also concerned about the impact on in-home attendance care services for car crash victims.

The Senate Fiscal Agency projects the House plan — like the Senate version — would increase state Medicaid costs each year as more drivers without unlimited auto insurance coverage rely on commercial or government-run health insurance.

“In many severe injury cases (in which the accident victim became dependent on long-term care), costs would shift to Medicaid as most people do not have long-term care coverage beyond the limited coverage provided to Medicare recipients,” the agency said.

That shift could cost the state about $65.9 million in additional yearly Medicaid costs by 2029, according to projections  If drivers are “less interested in unlimited” personal injury protection, “then the increase in Medicaid costs would be greater,” the agency said. 

House Democrats proposed a plan Thursday that would require insurance companies to cut individual bills by 40% and ban the use of non-driving factors such as zip code, gender or marital status. The legislation would keep full  personal injury protection but exempt seniors with Medicaid or lifetime retirement health care.

House Minority Leader Christine Greig said she hopes the package, which has yet to be introduced, will result in negotiations and ideas that could be the platform for compromise. The Farmington Hills Democrat said the rushed process that led to the Senate and House bills was a “sham.”

“This has always been about coming together,” Greig said.

Beth LeBlanc contributed. 


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