Gretchen Whitmer

Michigan’s Legislature on Friday passed a landmark bill that would cut the country’s highest auto insurance premiums by letting drivers forego a one-of-a-kind requirement to buy unlimited medical coverage for crash injuries. The votes followed the announcement of an agreement between Republican legislative leaders and Democratic Gov. Gretchen Whitmer. She said the legislation would guarantee rate reductions for every motorist and offer choice among personal injury protection, or PIP, levels. PIP, on average, makes up half of car premiums. The measure — approved 94-15 by the House and 34-4 by the Senate — also would prohibit the use of several non-driving factors in setting rates and scale back reimbursements for health providers that treat accident victims to 190% to 230% of what Medicare pays. Unlike several other no-fault insurance states, Michigan does not have a fee schedule for care covered by auto insurers. They pay much more for the same services than is paid by employer plans or government insurance such as Medicare or Medicaid. A driver choosing to stick with unlimited coverage would see a 10% PIP reduction. Someone who fully opted out would get a 100% cut, if they have health insurance, and potentially also avoid paying much of a $220 annual per-vehicle fee that reimburses car insurers when severely injured motorists’ expenses exceed a certain amount. People on Medicaid would have to get at least $50,000 in benefits and would pay 45% less. People picking one of two other options — $250,000 or $500,000 of coverage —Continue reading