No-fault insurance reform may be in play as Democrats take power in Michigan

• Gretchen Whitmer open to working with lawmakers on changes to auto no-fault
• Crash victims, care providers want to expand limits to health care reimbursements for crashes
• Outgoing Republican House speaker says hasn’t seen a plan that wouldn’t increase premiums

Auto crash victims and providers may get another crack at changing Michigan’s no-fault auto insurance law when Democrats take control of the Legislature in January.

A 2019 law ushering in major changes to Michigan’s insurance policies gave drivers the option to choose coverage levels. The reform was intended to lower the state’s highest-in-the-nation auto insurance costs, and decreased average premiums to $2,639 in 2021 from $3,096 in 2019.

But the law also cut by 45 percent the amount health care providers could charge for reimbursements on services to crash survivors not covered under Medicare— a change advocates say hindered patients’ access to high-quality care.

Related: 

• Court: Past crash survivors not subject to Michigan auto no-fault limits
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• Opinion | Gov. Whitmer, you broke your promise to our auto-injured children
• Opinion | Tweak no-fault reform to help seriously injured Michiganders

In all, 4,082 health care worker jobs have been eliminated since 2021, while 6,857 crash patients have been discharged from care since the policy took effect, a study by the Michigan Public Health Institute found.

Gov. Gretchen Whitmer told Bridge Michigan she anticipates conversations about ways to adjust the law may begin early next year. 

“There’s work to be done here to ensure that people that are injured can have the supports that they paid for,” Whitmer told Bridge Michigan. “I’m interested in pursuing that.”

Prior to 2020, Michigan was the only state where drivers were required to pay for full personal injury protection insurance. That became optional once the new law took effect, and drivers are now allowed to pick from varying levels of coverage.

The Michigan Catastrophic Claims Association — an industry-led nonprofit that collects annual fees from Michigan motorists to cover accident victims’ medical care — reduced its fees and issued $400-per-vehicle reimbursement checks to Michigan drivers at Whitmer’s urging in the aftermath of the 2019 law.

The association recently boosted its new annual per-vehicle assessments to at least $48 per vehicle per year, following a recent Court of Appeals decision that found patients who began receiving care for auto injuries prior to the 2019 law’s passage aren’t subject to the changes. That ruling is under appeal. 

Although reform advocates say the ruling eased some of the pressure, they are still pushing for legislative changes to ensure future victims wouldn’t bump up against the same issues. 

“What we are really looking for is a legislative solution that makes all of that moot, and we can just get back to restoring the continuum of care for crash victims,” said Tom Judd, president of the Michigan Brain Injury Provider Council. 

Rep. Julie Rogers, D-Kalamazoo, is a physical therapist who has worked with people who have been catastrophically injured and a longtime proponent of legislation to adjust the fee schedule outlined in the 2019 law. 

She said lawmakers feel a sense of urgency to revisit the law, even though Democrats are likely to have a busy agenda assuming control after 40 years without controlling both chambers of the Legislature.

“Auto no-fault issues are life and death,” Rogers said. “To me, that makes it really rise to the top of the list of things that need to be fixed.” 

Supporters of the existing law argue the changes were a difficult but necessary compromise to bring down costs.

In a statement provided to Bridge Michigan, Insurance Alliance of Michigan Director Erin McDonough said the 2019 reforms have made insurance more affordable for tens of thousands of drivers and meant Michigan is no longer the most expensive state to purchase auto insurance.

Ensuring those injured in car crashes receive medically necessary care remains a priority for insurers, McDonough said, adding that the 2019 law marked Michigan’s first attempt at creating checks and balances for medical costs. 

“We urge a broader look to ensure savings for Michigan consumers remain protected as the Legislature and governor seek any evaluation of reforms,” she said. 

If Whitmer and incoming lawmakers are able to land on a solution that makes tweaks to the law without compromising savings, current House Speaker Jason Wentworth said he has no issues — but none of the plans that have been floated so far would do that, he said. 

He has no plans to bring up the issue during the lame duck legislative session before the new term begins next year. 

“If there’s a sweet spot to fix the perceived problem that’s there, I’ve been willing to look at that since day one,” the Clare Republican said. “I’ve never been presented with a plan that actually fixes that and still reserves the savings. And so if they can tackle that next term, then great.”

William Bruck, a Republican representative-elect from Erie whose home care business had two clients impacted by the policy change, said one of his priorities is to look at ways to fix legislation that had “good intentions” but negatively impacts businesses and residents.  

The 2019 law “had some good outcomes, as far as there’s more people that now have auto insurance, but it had some down effects as well,” he said.

“We don't do a lot of auto cases, but we had two clients in particular that their rates were cut by almost 60 percent, and so that did not allow us to do care for them,” he said. “We’re not alone in that…I’m definitely open to reviewing that.”

Rogers said that while she believes the main focus should be on the needs of accident victims and the people who provide their care, it’s worth considering other changes that could make auto insurance less expensive.

Detroiters, for instance, still pay far higher insurance costs than drivers statewide: $3,148 per year in the metro area in 2021, while west Michigan drivers paid an average of $2,462 per year, according to data from The Zebra, an insurance comparison website based in Texas. 

“The whole focus of why this was done in the first place has been about insurance rates, right?” Rogers said. “The intention of the law change, which was the lower rate for everyone, didn’t really come into effect, and so I think we still need to look at ways to drive down costs.”