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Rep. Wozniak bill would undo no-fault reforms, cause premiums to increase

The Insurance Alliance of Michigan (IAM) today blasted CPAN and Rep. Doug Wozniak, R-Shelby Township, for introducing House Bill 4486, which would upend the savings Michigan drivers have been taking advantage of thanks to Michigan’s new auto no-fault law, which took effect July 2, 2020.

The bill would allow brain injury clinics — many of which are represented by CPAN — to continue the same unscrupulous overcharging they have done for decades under the state’s broken, outdated auto no-fault system. In the end, it would force injured motorists and insurance companies to pay rates made up by the employees and consultants of the clinics — literally putting the fox in charge of the henhouse.

“It’s unfortunate Rep. Wozniak chose to side with special interests instead of his constituents and drivers across the state who have been clamoring for relief from paying the highest auto insurance premiums in the country,” said IAM Executive Director Erin McDonough. “Instead of kowtowing to special interests, we urge lawmakers in both parties to give this new law time to work and push back on efforts to turn the clock back on these historic reforms by allowing certain medical providers to gouge Michigan families at a time they can least afford it.”

Under Rep. Wozniak and CPAN’s legislation, brain injury clinics — many of them created to take advantage of the ability under the old no-fault law to charge exorbitant fees — would be able to continue charging outrageous amounts for medical procedures.

To put the egregious overcharging into perspective, a blistering investigative report from the Detroit Free Press found an MRI at a medical clinic in Metro Detroit cost $500 under

Medicare, but the same MRI at the same facility and with the same type of machine will cost an auto insurer $5,300.

In July of this year, the final piece of the no-fault reform puzzle will be put in place, reining in that overcharging by creating a fee schedule for medical services. While the medical fee schedule doesn’t take effect until July 2, 2021, the lower rates consumers are paying now are due in large part to the projected savings from fee schedule.

For the second year in a row, the Michigan Catastrophic Claims Association (MCCA) lowered its per-vehicle fee for drivers also because of the expected savings from the medical fee schedule.

Beginning this summer, the per-vehicle fee for drivers choosing unlimited, lifetime medical benefits will be $86 — down from $220 in 2019. Drivers who choose other levels of coverage will continue to pay $0. The decrease, the second in two years, marks a 60% drop since reforms took effect.

Unraveling the medical fee schedule before it even has a chance to take effect will force the MCCA to reverse course on its fee reductions and ultimately make car insurance more expensive for everyone.

“Because of the COVID-19 pandemic, Michiganders have faced unprecedented economic uncertainty for the better part of 2020 and that could continue well into this year,” McDonough said. “The last thing they should have to worry about is having savings from the state’s new auto no-fault law ripped out from under them by unscrupulous actors and greedy special interests.”

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