No-Fault Auto Insurance Reform

Munson Healthcare is very concerned that the Michigan Legislature did not fully understand the impact of the auto no-fault legislation that was rushed through in the middle of the night, last week. The bill that passed the House on May 9 would cut nearly $400 million in funding from Michigan’s trauma centers.

“First and foremost we are concerned about our patients and their families who face the very real risk of running out of benefits if they are involved in a serious automobile accident,” Ed Ness, CEO of Munson Healthcare said. 

The elimination of lifetime benefits for all drivers will have a negative impact on our patients that need comprehensive and intensive long-term care following an auto accident.

In addition, the new government-imposed fee schedule for providers contained in this bill will impact our rural northern Michigan hospital system by $12 million dollars annually, a significant burden, when factored into an already fragile system. This reimbursement cut will force us to look seriously at the services we offer in our rural areas.   

Munson Healthcare agrees that reforms are needed to make Michigan’s expensive auto insurance system affordable. However, we are deeply disappointed that the legislature rushed through a bill, in the middle of the night, not fully understanding its consequences to patients and providers. 

Munson Healthcare Perspective

  • Munson Healthcare agrees that Michigan’s auto insurance system needs to be fixed.
  • Munson Healthcare is concerned about the impact that this legislation will have on our ability to continue providing the highest quality of care, closest to home for the patients we serve.
  • This legislation will result in an over $12 million dollar cut to the Munson Healthcare system.
  • This cut will be difficult to absorb while maintaining the same services as we do today.
  • As a result, Munson Healthcare will be forced to make tough decisions about the services we provide in the rural communities of northern Michigan that we serve.

Statewide Perspective

  • The Michigan Legislature’s current auto no-fault plan slashes nearly $400 million from trauma centers throughout Michigan in one year alone, and impacts the emergency care available to ALL patients, not just those injured in auto accidents.
  • Trauma is the leading cause of death in people ages 1-44 in the nation and accounts for 47% of all deaths in this age group.
  • In Michigan alone, crash-related deaths cost $1.04 billion per year.
  • In FY 2017, about one out of every two Michigan residents sought care in hospital emergency departments. Gutting Michigan’s trauma system could jeopardize the lives of millions of Michiganders.
  • Our elected officials MUST act now to protect Michigan’s safety net of Level I and II trauma centers from funding cuts that would impact their ability to provide comprehensive emergency care to patients in need of critical, life-saving care 24 hours a day, 7 days a week, 365 days a year.
  • Hospitals are offering to reduce payments to 75% of charges, but Level I and II trauma centers must be held harmless to maintain the resources necessary to providing life-saving emergency care.
  • Allowing Michigan drivers to fully opt-out of their Personal Injury Protection is short sighted and fiscally irresponsible as it poses a severe and widespread threat to Michigan’s safety net of trauma care and will lead to higher healthcare costs, higher health insurance premiums, an explosion of lawsuits, and increased reliance on government-support programs.

The Background

Since 1973, Michigan has offered no-fault auto insurance coverage, which means that each person involved in an auto accident is provided medical coverage by his/her own auto insurer, as opposed to the at-fault driver’s insurer. Michigan is currently one of 12 states with no-fault insurance, which was designed to ensure that injured victims receive fair and expedient coverage for their injuries and recovery rather than facing drawn-out court battles and reduced compensation.

Currently, Michigan’s no-fault auto insurance coverage assures that auto accident victims receive compensation for the reasonably necessary medical and rehabilitative care they need for recovery. Without this coverage, injured patients would face high out-of-pocket health insurance deductibles and/or medical bills that could be financially crippling for years to come – if not a lifetime.

For several years, however, auto insurers have supported legislation that would limit patients’ benefits as well as reduce reimbursement rates to providers. This includes legislation that would impose a fee schedule or cap on reimbursements to health care providers for caring for auto accident victims. Moreover, some legislators in Lansing seek to eliminate motorists’ guaranteed medical benefits through no-fault reform proposals.

Call To Action

Please contact your legislators immediately and urge them to adopt fair, common sense reforms and ensure Michigan drivers are protected.