Bill Claims to Save Michigan Drivers Money: Critics hope to put the brakes on it

REGION – Kris Ruckle of Traverse City calls it "the worst bill ever." She says she's very disappointed anyone would think it's a good idea. She's referring to House Bill 4936, the Consumer Choice Insurance Act, which was introduced by Rep. Pete Lund (R-Shelby) in September. While the proposed bill keeps Michigan's no-fault insurance system in place, drivers would see other changes.

One of those changes would be getting rid of the mandated lifetime unlimited medical coverage Michigan motorists are forced to buy. Rep. Lund instead wants to let drivers (and insurance companies) save money by choosing between $500,000, $1 million and $5 million policies.

In an audio clip on his website he says, "We are trying to give long term control to the people of the state by giving them options on exactly how much they want to take in the form of risk."

However, Ruckle argues it's not a risk worth taking and recalls "the worst day of my life." On April 11, 2007, her mom and two children were in a car accident. Ruckle's mother and son, Jordan, then 8, went on to recover from their injuries, but Brittney Ruckle, then 9, was fighting for her life with a traumatic brain injury.

After months in the hospital, Brittney was able to return home, but had a long journey ahead. She's currently in a wheelchair and needs constant care. Ruckle says her daughter will require supervision the rest of her life, and her medical bills will exceed the $5 million cap under the proposed bill.

"Once that money runs out, I would then have to drain my savings and 401(k) to pay Brittney's medical bills. I would then go on Medicaid and become a burden to tax payers," says Ruckle. "We need to keep the system how it is."

Supporters of the bill, however, say forcing people to pay for unlimited coverage isn't necessary or cost-efficient. They point to studies like the one done by EPIC Consulting, LLC that found 99.1 percent of auto accident injuries lead to less than $250,000 in medical costs.

Peter Kuhnmuench, Executive Director of the Insurance Institute of Michigan, says as it stands now, the law is not sustainable and is costly to consumers. Referring to the most recent data from the National Association of Insurance Commissioners, he says Michigan's car insurance prices are up to 25 percent higher than neighboring states which don't have unlimited coverage. The average premium in Michigan is $1,035, compared to only $700 both in Ohio and Indiana. Those in favor of the bill say Michigan drivers could save anywhere between 15 to 40 percent on their rates if it's passed into law. (Although opponents say nowhere in the bill are these savings guaranteed.)

One of those opponents is Ryann Embury, an attorney at Miller Embury, PLLC in Traverse City. He has practiced law both in Arizona, which doesn't have a lifetime of unlimited medical coverage, and Michigan. He says Michigan's no-fault law, as it is now, should be a model for other states. Embury also believes insurance companies and supporters are trying to "dupe" drivers into saving money, instead of looking out for their best interests.

"It's very shortsighted to tell someone to save a few dollars, instead of convincing them to spend a few dollars now in case of a major car accident." He also fears if the bill becomes law, he would become a debt collector for medical bills because many patients would be underinsured.

Much of the medical field is also speaking about against the proposed changes, including Munson Medical Center. Chief Executive Officer Ed Ness says trauma care is very expensive and under the bill, patients could use up their resources fairly quickly and then be forced to turn to Medicaid.

He's also concerned about another part of the bill that he says could cost Munson around $6.5 million annually, resulting in major budget cuts. Currently, hospitals charge insurance companies their normal fees for treating patients in catastrophic accidents. But under the new plan, a medical fee schedule would be put in place, similar to workers' compensation, setting fixed prices for services. According to the Coalition for Auto Insurance Reform, on average, reimbursement costs for no-fault claims are roughly four times what Medicare pays for the same procedure.

Mark Wilson, admissions director of the Lighthouse Neurological Rehabilitation Center, with locations in both Caro and Kinsley, agrees with Ness. He says the lifetime unlimited medical coverage is the heart of Michigan's no-fault insurance and should stay in place. Like Munson, he says his facility would also lose money if a fee schedule is put in place, resulting in possible layoffs.

Bill 4936 is currently making its way through the state house, and has been referred to the Committee on Insurance. If it passes a vote of the full house, it will go to the state senate for more debate, and finally to the governor, who can sign or veto it. BN