CPAN: PIP choice would be a ‘solution’ that actually creates new problems, by reducing care and shifting costs from insurance companies to taxpayers

John Cornack, president of CPAN, issued the following statement in response to today’s Senate Insurance and Banking Committee hearing. The hearing focused on dismantling Michigan’s no-fault auto insurance system and replacing it with Personal Injury Protection (PIP) choice, which would allow insurance companies to sell junk plans with no guaranteed rate reduction.

“There are two fundamental problems with so-called PIP choice. First, it will deprive Michigan citizens of essential care. PIP choice means families will go bankrupt because they can’t pay their medical bills, and catastrophically injured children won’t receive the care they need. That’s unacceptable.

“Second, implementing PIP choice would likely result in a hidden tax increase on all Michigan citizens, as catastrophically injured drivers would have to declare medical bankruptcy and end up on state Medicaid. In fact, the nonpartisan House Fiscal Agency in 2017 found that a PIP choice plan would shift $150 million in costs to the Medicaid system. That’s a good deal for insurance companies and a bad deal for everyone else. As Gov. Whitmer said in her State of the State address last night, we should reject ‘solutions’ that actually create new problems.

“There’s a better way to lower rates – through effective rate regulation, prohibiting the use of non-driving rating factors when setting rates, implementing a fee schedule for health care providers, cracking down on fraud, and enacting other common-sense, bipartisan reforms.”