The debate over changing Michigan’s no-fault auto insurance system is underway in Lansing. Governor Rick Snyder Thursday introduced his plan to end unlimited lifetime medical benefits for people severely injured in auto accidents.
The governor’s plan would cap those benefits at a million dollars. Snyder says insurance rates are unacceptably high under the current system.
“We’re significantly higher than other states in the Midwest, we’re the eighth highest in the country, and that’s not a good situation,” he says. “We need to do something about it in terms of our costs.”
Supporters, including House Insurance Committee Chair Pete Lund, say even the proposed benefit cap is far higher than what’s required in any other state.
“Understand that right now, Michigan – when it comes to benefits – we are number one in the country. And if this bill passes, we will drop all the way to number one,” says Lund.
Governor Snyder and many Republican lawmakers also want to require that auto insurers lower their rates by $125 dollars for the first year.
But the top Democrat on the state House insurance committee says it’s bad policy, that there’s no guarantee drivers will end up paying lower rates in the long run.
“There is only a guarantee that we will have less coverage. And we will still be paying more. We will be still paying an assessment, and we will be paying a Medicaid charge now as well,” says Representative Kate Segal.
Supporters plan to introduce the legislation next week. a bill to cap the no-fault benefits was also introduced two years ago, but it never made it out of the House.