Way Too Many Faults in Mayor Duggan’s No-Fault Reform Proposal

Caps on injury coverage would cost state taxpayers hundreds of millions in new Medicaid expenses, leave patients without care while forcing them into poverty

Lansing – Detroit Mayor Mike Duggan joined House Speaker Tom Leonard and Rep. Lana Theis today to announce a proposal to slash injury care for Michigan auto accident victims. The proposal calls for allowing motorists to purchase insurance policies that cap care at either $250,000 or $500,000, or drivers can continue purchasing lifetime injury coverage.

In response to the proposal, Coalition Protecting Auto No-Fault (CPAN) President John Cornack issued the following statement:

“All stakeholders in the no-fault debate are working on creating a better auto insurance system, but what was proposed today cuts costs on the backs of some of Michigan’s most vulnerable people,” said Cornack. “People who are paralyzed, people with brain injuries and children whose parents who purchase these bare-minimum policies will all suffer under this proposal because they won’t get the care they need. And to make matters worse, the costs of caring for these accident victims will ultimately result in a cost increase for Michigan taxpayers.”

Cornack notes that today’s proposal is similar to failed legislation that that also capped personal injury protection coverage. A 2011 Public Sector Consultants report found that capping no-fault medical benefits would result in a cost shift of $30 million to Michigan’s Medicaid system in the first year alone.

“What was announced today is nothing more than a recap of failed ideas from the past – capping coverage and shifting costs to Michigan taxpayers who can’t afford to pay tens of millions more in Medicaid every single year. If we want lasting reform that brings real savings for drivers and the state of Michigan then we need a comprehensive, bipartisan solution that addresses the core issues behind the excessive rates,” said Cornack.

Rather than putting caps on accident victims, CPAN is supporting the bipartisan “Fair and Affordable No-Fault Reform” legislation announced by a group of 15 State House members from both parties.

The Fair and Affordable No-Fault Reform legislation would:

  • Rein in medical costs related to auto injuries by setting reasonable fee schedules that are 185 percent of Workers Compensation and set attendant care limits that accommodate the nature of a person’s injury;
  • Stop non-driving related factors such as credit score, gender and job title from unfairly impacting auto insurance rates;
  • Bring transparency to the Michigan Catastrophic Claims Association by making its ratemaking data available to the public;
  • Aggressively tackle fraud and claims handling abuse by creating a state fraud authority.

CPAN is urging lawmakers to support the comprehensive Fair and Affordable legislation, which maintains lifetime injury coverage for accident survivors while still making significant cost reductions to Michigan’s auto insurance system.

“We think the Fair and Affordable No-Fault reform package is a better, more responsible solution that makes real and lasting reforms without increasing costs to Michigan taxpayers and without taking away coverage for catastrophic accident victims,” said Cornack.


Read the full language of the Duggan / Leonard / Theis Cap on Care Bill here.

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