Charlie Langton: Say 'No' To Auto Insurance Bill
Today on the show we had an interesting discussion about Michigan's no-fault law. There is a bill making its way through the legislature that wants to change Michigan's auto insurance law. Essentially, the law would eliminate lifetime medical coverage for those involved in a car accident and in exchange the thought is that the high cost of auto insurance premiums would go down. This is a bad law. I specifically asked state Rep. Pete Lund, who sponsored the bill, if he could guarantee that auto insurance rates would go down or if there was any provision in the law that would regulate insurance premium costs and he said no- no to both questions. So I say no.
People who suffer serious injuries should not become a burden of the state and in particular the Medicaid system which would happen if lifetime medical coverage disappeared. Remember, it is a crime in Michigan to drive without insurance- you could go to jail if you don't have insurance! Private insurance companies benefit with the full force of the criminal law for their product. No other company that I'm aware of can say that. Therefore, it doesn't bother me that insurance companies have to spread the risk of the very few but tragic cases involving seriously injured people throughout all their customers.
The only aspect that I could support of this proposed legislation would be to cost-contain medical coverage. I believe that the cost of insurance is directly related to the costs that doctors and hospitals charge for their services. Medical providers will benefit because of the volume of work and therefore they can take less money but make up for it in volume. Guaranteed money is better than nothing. Also, if seriously injured people are forced to use Medicaid for payment, the medical providers will get even less.
The current system works. It doesn't need tweaking. Although the current cost of auto insurance may be higher than in neighboring states, the benefits one can expect, especially in a tragic car accident, far outweigh those extra costs. This bill shifts the financial burden to care for the seriously injured from profit-making insurance companies to a deficit-ridden state. Moreover, it adds to the Medicaid burden at a time when conservatives are trying to cut those costs. Therefore, I would urge the legislature to vote no on the auto reform bill.
