No-fault auto insurance overhaul bill passes Michigan Senate

Auto insurance - No Fault - Car accident

The state’s Legislature held its first vote to modify the system near the end of last week.

The Michigan Legislature voted on a bill to modify the no-fault auto insurance system in the state, approving changes meant to reduce the cost of coverage for drivers while overcoming some of the challenges left behind by the overhaul made in 2019.

The 2019 changes cause certain medical providers to stop providing care to car crash victims.

The new legislation voted on last week passed the Senate. It was meant to boost reimbursement rates for medical providers providing treatment to car crash victims in the state.

Auto insurance - Michigan Law

The primary bill in the package was sponsored by Michigan Senator Mary Cavanagh (D-Redford Township). It was intended to repair what Cavanaugh referred to as unintended consequences of the changes to the no-fault auto insurance system in 2019. At that time, providers were issued a pay reduction of 45 percent for services commonly required by survivors of catastrophic vehicle accidents. That said, earlier this year, the Michigan Supreme Court issued a ruling stating that the reductions aren’t applicable to patients injured in crashes that occurred before the signing of the law in June 2019.

The Senate passed the new bill last week in a vote of 23-14. According to Senator John Damoose (R-Harbor Springs), the changes in the new bill are overdue. He conceded that they might not be implemented in time for some crash victims affected by the shortfalls of the 2019 changes.

“Even if we fix this today, some of the damage is permanent and cannot be undone,” said Damoose in a speech describing the providers who closed their doors following the overhaul bill four years ago.

The new auto insurance bill is meant to help overcome problems with the previous overhaul.

According to Cavanaugh, lawmakers in the state can focus on correcting the “crisis of care” in the state without causing harm to the current law’s cost-saving benefits.

However, some Republican lawmakers have expressed concern over the effect this will have on the cost of auto insurance for drivers. According to Michigan Senator Ed McBroom (R-Waucedah Township), the package is a “pile of junk”.

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