People have been upset with the cost of auto insurance since well before my time as an elected official. I met and discussed this issue with folks from my House district, and while a majority were in favor of some type of reform to reduce rates, some were still on the fence about whether they were willing to give up the quality of care that comes with the high premiums.
In the past, there was always the same sense of reluctance among members and none of the attempted reforms seemed to quite get it right. I think the mood for change has heightened due to the dramatically increasing rates we have been seeing in recent years. They are simply rising faster than people can keep up with and I think everyone finally said enough is enough.
The original no-fault law was enacted in the 1970s and over the years, the overly complicated system wound up doing the exact opposite of what was promised. We ended up with a working family that could no longer afford auto insurance for their cars. The time for change was now, and I’m glad we were able to get it done for Michigan families.
The plan we approved doesn’t simply scrap no-fault and move to a simpler, cheaper system. The quality of care traumatic accident victims receive was not something we just wanted to forget about. Throughout the negotiations, the focus really lasered in on providing people with a choice. When purchasing any other type of insurance, you have options available based on your specific needs and what you can afford. The no-fault system was so burdensome for hardworking Michigan families because they were only allowed to choose top-tier care that many of them couldn’t afford.
Under the legislation that the Legislature approved and Gov. Gretchen Whitmer recently signed into law, drivers will have the choice to select coverage that best meets their needs and budget and seniors will have the option of allowing Medicare to cover health care expenses stemming from an auto accident. Individuals with private health insurance will also have this option.
The new law goes beyond giving drivers options when choosing their rates. It also seeks to address several other factors that have driven up our rates.
Aside from the government-mandated coverage, the most common complaint about the no-fault system is the inflated cost of medical care. We’ve seen countless examples of care through a no-fault claim costing two, three or four times that of traditional health insurance. The new law includes a fee schedule to cap the amount providers can charge insurers.
The new law also seeks to reduce costs by decreasing the number of uninsured drivers, reducing fraud and frivolous lawsuits and eliminating the use of any nondriving factors when an insurance company sets their rates.
This is something Michigan families have been asking for and have deserved for a long time. This was a true testament to what bipartisan efforts, tough negotiations and compromise can achieve. This legislation is not perfect, and no one group of people will be completely satisfied with it. This plan is a good effort toward providing meaningful relief for all Michigan drivers.
Sen. Rick Outman, R-Six Lakes, represents the 33rd state Senate District, which includes Clare, Gratiot, Isabella, Mecosta, and Montcalm counties.