House panel OKs $1M cap on medical benefits for auto victims

Story originally appeared on the Detroit News.

Lansing — A House committee Thursday approved sweeping changes to Michigan's generous medical benefits for auto accident victims in a move critics say will bankrupt severely injured drivers, shift costs to taxpayers and deny the injured long-term care.

In a party-line vote, the Republican-controlled House Insurance Committee approved capping lifetime medical benefits for auto victims at $1 million and $250,000 for injured motorcycle riders. The $1 million cap would remain the highest amount of any state in the nation.

The legislation, backed by Gov. Rick Snyder, faces political obstacles as it heads to the House floor.

The Democratic caucus passed a resolution Thursday opposed to the bill, and Oakland County Executive L. Brooks Patterson and at least 10 Republican House members said they don't want to change Michigan's personal injury protection law.

"I have major, major problems with this bill," said state Rep. Martin Howrylak, R-Troy. "Unfortunately, a million dollars doesn't get you anything in health care these days."

The committee heard two days of testimony from insurance industry executives who want medical expenses reined in and impassioned pleas from accident victims and their families worried about losing their care.

The legislation aims to give auto insurance companies the power to negotiate lower payments with doctors and hospitals.

"If the cost of delivering the MRI is $3,200, then everybody should have to pay $3,200," said Heather Drake, vice president of government relations for AAA Michigan.

The legislation will not affect drivers injured before Dec. 31 or those whose medical bills exceeding $500,000 are covered by the Michigan Catastrophic Claims Association, said the bill's sponsor, state Rep. Pete Lund, R-Shelby Township.

"The intent of this bill is, has been and will remain that people who are currently in the system will continue to receive the benefits that they receive," said Lund, the insurance committee chairman.

The legislation changes the definition of the type of medical care auto insurance companies will pay for from what is defined as "reasonably necessary" to "medically appropriate."

"We fear for many patients that's going to be a one-way ticket to the nursing home," said George Sinas, general counsel for the Coalition Protecting Auto No-Fault, a group opposed to the bill.

Sinas said most accident victims would likely go on the Medicaid health insurance rolls for the poor after breaking the $1 million cap.

The legislation contains some curbs on payments to family members who care for loved ones at home, though the committee restored 24-hour coverage for the severely disabled.

The committee's amended version of the bill eliminates a $50,000 cap on expenses insurers pay for accident victims to make their homes handicap accessible.

Under the proposal, rehabilitation services would be limited to "meaningful and measureable lasting improvement in the injured person's functional status."

Lund on Thursday said he doesn't know who would determine an auto accident victim's meaningful and measureable improvement.

Erica Coulston, 34, of Bloomfield Hills, who was paralyzed in a 2001 car accident, said the effort "is a mechanism for denial."

Coulston, co-founder of a spinal cord injury program in Southfield, testified her rehabilitative therapies paid for by her auto insurance have slowly improved her respiratory, digestive and mental health.

The legislation would require auto insurers cut premiums for all drivers next year by $125, though critics argue there's no guarantee premiums won't rise in 2015.