DMC, DUGGAN CLASH ON DETROIT AUTO INSURANCE PLAN

Original Story: detroitnews.com

Lansing — Mayor Mike Duggan is at odds with his former employer at the Detroit Medical Center in his legislative battle to let Detroiters buy lower-cost auto insurance coverage with limited medical benefits. A Detroit car accident attorney is following this story closely.

Duggan's "D-Insurance" bill gained approval from the Senate Insurance Committee Wednesday with changes that would let other cities with 35 percent uninsured drivers allow insurers to sell plans capped at $250,000 in car injuries. Claims above that cap would be directed to a driver's health insurance.

But the DMC, where Duggan was CEO from 2004-12, opposes the Detroit mayor's bill because it eliminates unlimited catastrophic coverage for drivers who suffer brain and spinal cord injuries, said Conrad Mallett Jr., chief administration officer of the hospital system. A Detroit car accident lawyer represents clients injured in automobile accidents.

"D-Insurance is not going to be the panacea for the people that live in Detroit … that the mayor believes," said Mallett, a Detroiter who worked under Duggan for eight years.

The DMC treats drivers with severe brain, spinal and neurological injuries from car accidents at its Rehabilitation Institute of Michigan.

"We believe that access back to the catastrophic insurance fund is critical," Mallett told The Detroit News. "We are with the mayor on everything but this."

Duggan, who has met with Detroit hospital leaders in the past week, downplayed the impact to the DMC's bottom line and care to patients.

"It has only a marginal impact on the hospitals," Duggan said Wednesday. "The hospitals will still be able to charge their triple Blue Cross rate."

The years-long battle over reforming Michigan's no-fault auto insurance system rests with the level of long-term care insurers should have to cover for treatments and therapies after hospitalization. A Detroit insurance defense lawyer helps insurance carriers analyze and understand all of the legal and business issues involved in processing insurance claims.

Duggan's insurance plan has been introduced as an alternative to making statewide changes to the insurance system, which passed the Senate last month but has stalled in the House after intense lobbying against the bill by hospitals and rehabilitation centers.

"It's a pilot project ... that maybe someday other areas of the state could follow," said Sen. Rick Jones, R-Grand Ledge.

Duggan, a Democrat, is trying to keep the Republican-controlled Legislature focused on his narrowly tailored legislation, which does not include caps on the amounts hospitals can charge for individual procedures like the bill stalled in the House would do.

"This doesn't have nearly as dramatic of an effect on the hospitals as the earlier bill," Duggan said.

Duggan's bill focuses on lowering Detroit's 60 percent rate of motorists illegally driving on city streets and freeways without insurance.

The Detroit mayor argues his plan, which would be voluntary for drivers, could cut insurance premiums by one-third or $1,000 for the typical car owner in the city.

"We think the great majority of the financial abuses are coming post-hospital," Duggan said. "I don't believe the hospital is where the problem is."

Mallett said he remains convinced that Duggan's plan will really drive down the cost of Detroit's highest-in-the-nation auto insurance rates.

"We'd be glad to be part of the conversation, but for the life of me as someone who lives and works in the city of Detroit I have to say I'm unconvinced," he said.

The committee amended the legislation Wednesday to allow any city with an uninsured rate of at least 35 percent to petition the state insurance commissioner to allow insurers to sell lower-cost plans with less benefits. The original version of Duggan's proposal set the threshold at 50 percent. A Grand Rapids insurance defense lawyer is following this story closely.

The committee voted 5-3 to advance the bill to the Senate floor.

Sen. Bert Johnson, D-Highland Park, said the new threshold should allow his hometown, Hamtramck, Ecorse, River Rouge, Inkster, Pontiac, Benton Harbor, Saginaw and, possibly, Flint to participate.

Sen. Margaret O'Brien, R-Portage, voted for the bill but expressed disappointment that it would be limited to drivers in urban cities with high concentrations of poverty.

"Poverty knows no municipal lines," O'Brien said.

Under the bill, drivers who opt to buy a lower-cost, cut-rate auto insurance plan would surrender any right to make a claim to the Michigan Catastrophic Claims Association, a fund all drivers pay into for coverage of life-altering vehicle injuries.

"There's going to be some huge heartburn on the part of medical providers," said Johnson, who supported the bill.

But Johnson argues the DMC and other hospitals will ultimately benefit from having more Detroit drivers with insurance they can afford.

Patterson under fire for arguing against MI no-fault insurance change

Story first appeared on The Detroit Free Press -

The state has fired back at Oakland County Executive L. Brooks Patterson, who made a very public plea this week to tread carefully before making big changes to the state’s no-fault insurance law.

Gov. Rick Snyder has made no-fault reform one of his top priorities for the year, saying that Michigan has the 10th highest auto insurance costs in the nation. And Kevin Clinton, Commissioner of the Office of Financial and Insurance Regulation replied to Patterson’s open letter with one of his own.

“I was very disappointed to read Oakland County Executive L. Brooks Patterson’s recent statement regarding the Governor’s proposal,” the letter said. “In spite of his assertion, there is no effort to ‘dismantle’ no fault. To the contrary, our effort is to save no fault for the long-term.”

Patterson, who suffered critical injuries in a two-car crash on Aug. 10 that also paralyzed his driver, James Cram, said drastic changes to no-fault and the Michigan Catastrophic Claims Association would hurt Michigan’s economy and hospitals, shift health care costs to Medicaid and harm critically injured car crash victims.

The MCCA reimburses insurers for costs of more than $500,000 for the care and treatment of those seriously injured in automobile accidents.

Patterson said an independent financial analysis of the law and consequences of changing it should be done before any changes are made.

But Clinton said in his letter that Michigan’s economy is suffering because of skyrocketing insurance rates.

“How long can we ask our citizens who buy state-mandated coverage to foot the bill,” he said.

The insurance industry also noted this week that Patterson should wait to complain about no-fault reform until a bill is actually introduced.

Reform was discussed last year, but never received a vote in the full state House or Senate. Legislators have said they plan to reintroduce a bill this year.

“We believe that L. Brooks Patterson has been an outstanding public official and a visionary county executive, but his vision on this issue is a little cloudy,” the Michigan Insurance Coalition, a trade association of insurance companies in the state, said in a press release today. “Michigan’s No-Fault system is a runaway train that needs reform now before it plunges off the fiscal cliff forever.”