Auto insurance legislation debate continues

By: April Lehmbeck | C&G Newspapers | Published May 15, 2013

Erica Coulston knows what it’s like to have her life changed in a second, to suffer a catastrophic auto accident injury and face the everyday medical care needs that come with it.

Coulston, who is paralyzed from a spinal cord injury she sustained as a passenger of a vehicle in 2001 at the age of 23, is a vocal opponent of House Bill 4612, which she claims would change the needed care a catastrophic car accident patient would be entitled to, if passed. Coulston is co-founder and president of a Southfield company called Walk The Line to SCI Recovery, Inc., which offers a physical therapy and exercise program for spinal cord injury recovery.

She is a success story — someone who takes part in ongoing physical therapy and has continued to show improvements. But what she feels might not be possible for others, if this bill passes.

“I have pursued aggressively my physical recovery through physical therapy and other alternative therapies,” she said. “I continue to make significant progress as the years have gone on.

“There’s so much about this bill that’s just anti-patient, it’s unbelievable to me,” she said.

The proponents of the bill, however, don’t feel that the change will hurt those who need medical care, but it will start to control some of the costs through the Michigan Catastrophic Claims Association.

State Rep. Pete Lund, R-Shelby Township, is the primary sponsor of House Bill 4612, which is an attempt to bring some relief to residents feeling the hit each time their auto insurance rates take a hike.

In Michigan, drivers involved in catastrophic auto accidents are protected under the Michigan Catastrophic Claims Association with unlimited lifetime medical benefits for those injuries. The Association, however, announced another rate hike to maintain the fund, and some argue that costs under the current program are unsustainable.

Lund’s legislation proposes a cap of $1 million in benefits, with some other changes as well, like tackling fraud in the system.

“Forty-nine other states have nowhere near our benefit,” Lund said in an audio clip on his website, adding that the state with the next-highest benefits has a limit of $50,000. “I don’t think, in other states, they leave their people to die, and we wouldn’t either.

“People would be covered by their health insurers like they are in 49 other states,” he said.

Lund claims that insurance rates are too high for Michigan drivers, with hikes rising three times that of inflation, according to a press release.

Lund is not alone in his quest to do something to help families struggling to pay for auto rates. Gov. Rick Snyder and some other state officials are on board, as well.

Snyder has argued that changes to the current system will continue to cover accident victims better than any other state. The legislation requires no-fault insurers to file rates that reduce annual premiums per car by $150 by the end of this year, according to a summary of the bill.

Supporters argue this legislation will be beneficial because it will end higher care costs for those involved in auto accidents than other patients. Michigan’s average auto insurance medical claim is “twice as high as the next closest no-fault state,” according to a press release.

Other supporters include state Rep. Ken Goike, R-Ray Township, who is a cosponsor of the bill. He said his constituents have asked him to look for ways to promote lower rates. He said he has carefully considered the testimony and talked to people on this issue.

Goike especially likes the provisions to tackle any fraud in the system — which could be driving costs up, as well — by establishing an Insurance Fraud Authority.

“It seems like there’s a lot of fraud,” he said.

He is concerned about the rising costs of the fund, which he said started out at $3 per car back in the 1970s, when it was initiated.

Now, it’s more than $180, according to a press release from Lund.

“The constituents that I’m talking to are saying, ‘Holy Cow,’ rates are so high,” Goike said. “We’ve got to do something to contain this.

“It’s going to keep going up and up and up,” he said.

Another benefit of getting the costs of insurance down could result in those people who are currently on the road without insurance, due to the costs, being able to afford the required insurance, Goike said when talking about 20 percent of people without auto insurance.

“I feel obligated to come up with some type of solution that benefits everyone,” he said.

Oakland County Executive L. Brooks Patterson, who suffered severe injuries from a major collision himself last year, is on the opposite side of the issue, fighting against the legislation.

Patterson also knows others who have suffered catastrophic injuries, including Coulston, who was named the winner of Patterson’s Elite 40 under 40 this year.

In a written statement to the House Committee on Insurance, Patterson states that the bill “slices and dices and effectively repeals Michigan’s unique no-fault insurance.”

“The so-called reforms proposed and House Bill 4612 are draconian in nature,” Patterson stated in his written testimony. “They will leave the catastrophically injured without any hope of regaining a modicum of an improved quality of life. The catastrophically injured know that their ultimate outcome will be to be placed in the Medicaid system at taxpayers’ expense and basically warehoused.”

Despite the serious injuries he sustained in the accident last year, Patterson stated in his written testimony that his injuries and those of his driver were covered by workers’ compensation, not the fund in question.

Laura Appel, Vice President, Federal Policy & Advocacy at Michigan Health & Hospital Association, said this is very similar to something that was passed in 1993, but overturned by voters in 1994. She said the change to the no-fault system was a good one in the 1970s, which kept people from having to wait out the outcome of lengthy lawsuits when their needs were immediate.

She said she sees many cases of catastrophic injuries, and the bills add up quickly.

“It’s a very tough situation when something like this happens to a family,” Appel said, adding that, with the current system, “we don’t drive people into bankruptcy or other financial difficulties when they suddenly have to take care of family members.”

Appel said a lesser cap could be reached before the end of the first hospital stay.

“There are just really serious things that can happen to people in auto accidents,” she said. “You can exceed some of these monetary limits very quickly.”

Appel said they are not opposed to every part of the current bill. For instance, like Goike, she believes tackling any issues of fraud is a good initiative.

However, she also says that her organization has tried to work on other things that could be changed instead of adding this level of a monetary cap to benefits.

“We’ve offered a series of reforms,” Appel said. “We have offered our support to the anti-fraud measures in the bill.”

She has said that they have agreed to come up with some sort of limits, but disagree on the amounts.

“We are very concerned that people get the appropriate care,” she said.

Coulston raised concerns about the limitations to physical therapy, legislation regulating health care needs and limits that are subjective in nature.

“They’re really making a decision that’s a doctor’s decision … and certainly not our Legislature’s decision,” Coulston said. “The biggest message is really the difference between auto no-fault coverage and a traditional health insurance.” 

She has ongoing care and has far surpassed that $1 million cap. She also pointed out that the current benefits provide for other needed help, like vocational training for those who need it, which wouldn’t be provided by other insurance programs.

She said many will end up on Medicare or Medicaid and not get the access to care and medical equipment they would receive through the current no-fault situation. She said sometimes the reimbursement rates are so low that some providers won’t see people.

As for the argument that people in other states get by with less, she said she doesn’t think getting by is “what we want for people in Michigan.”

“It could be any one of us,” Coulston said.