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July 1st: Get ready to pay more for auto insurance

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TC Talks
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Re: July 1st: Get ready to pay more for auto insurance

Post by TC Talks » Tue May 07, 2019 2:19 pm

And will we see a rate reduction if this passes? I smell profit-taking for the auto insurers.


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Re: July 1st: Get ready to pay more for auto insurance

Post by MWmetalhead » Tue May 07, 2019 4:20 pm

Yes, we will definitely see rate reductions. Our rates will now resemble those of New Jersey.

Insurers will also be able to operate more profitably.

It is a win-win.

Update - unfortunately, the left-wing loon in the Governor's mansion has threatened to veto the legislation (should it reach her desk in substantially current form) and basically disparaged it in prepared remarks today.

https://www.detroitnews.com/story/news/ ... 126723001/


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Re: July 1st: Get ready to pay more for auto insurance

Post by TC Talks » Tue May 07, 2019 6:09 pm

Wrong,

The law strips protections but does not guarantee any change in rates. This is turning into Big Healthcare vs Big Insurance

If healthcare must provide fixed cost rates, shouldn't the auto insurers?

There was lots of talk about big insurance cuts but nothing that assures that we are trading coverage for costs.

And tuck that left-wing rhetoric about our moderate Governor away. The State Senate has been stripping consumer rights from us for years.

You do realize that hospitals are on the hook for people who opt out of pip coverage and have no health insurance, right?


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Re: July 1st: Get ready to pay more for auto insurance

Post by Deleted User 14992 » Tue May 07, 2019 6:18 pm

Let the left get their hands on this and again we all will be screwed. Wait until GW gets her way on this “Fix the damn Roads” crap and we will all get screwed without a kiss. Registration fees and Property Tax is where she’s going next.



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Re: July 1st: Get ready to pay more for auto insurance

Post by MWmetalhead » Tue May 07, 2019 7:07 pm

Wrong,

The law strips protections but does not guarantee any change in rates. This is turning into Big Healthcare vs Big Insurance

If healthcare must provide fixed cost rates, shouldn't the auto insurers?
Health care does not need to provide fixed cost rates. The hospital, medical clinic, whatever can either provide the service in question at the rate the insurer is willing to pay, not accept the insurance plan in question, or charge the patient for the portion insurance is unwilling to cover.

As auto insurance consumers in Michigan, we are FORCED by law to purchase insurance. We are being forced to spend money on at least some minimum level of insurance coverage (assuming we wish to be law abiding citizens).
There was lots of talk about big insurance cuts but nothing that assures that we are trading coverage for costs.
So, how does one determine the "right" rate insurance companies can charge? There are many different vehicle makes, model years, costs, reliability track records, people with different driving records, differing crime rates by zip code, etc., etc.
And tuck that left-wing rhetoric about our moderate Governor away. The State Senate has been stripping consumer rights from us for years.
Oh, my bad. Thank God, Governor Whitmer is looking out for me!!! God forbid I be permitted to purchase a lower level of insurance coverage.

The auto insurance marketplace is very competitive. Price engineering is not needed.

All I'm proposing is Michigan follow a model that is similar to that used by some of the 49 other states - not be an extreme outlier because some extremely risk averse types feel the safety net of the current system is indispensable.
You do realize that hospitals are on the hook for people who opt out of pip coverage and have no health insurance, right?
What about all the motorists in Michigan who do not purchase auto insurance because it is cost prohibitive? I have zero sympathy for the hospitals in Michigan. They've been using our auto insurance to price gouge.

If it were up to me, I'd keep the MCCA. The medical care fee schedule - which is a prominent part of the current legislation - would serve to reduce MCCA payouts, which by itself would enable the MCCA fee paid by motorists to be reduced.

It will be interesting to see what the House bill does with the MCCA.


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Re: July 1st: Get ready to pay more for auto insurance

Post by Vic Doucette » Wed May 08, 2019 8:29 am

We were with the same large insurance company for at least 25 years and perhaps longer. I dutifully paid the premiums each month as they crept higher and higher.

A billing problem popped up a few months back that nobody could solve -- the agent blamed the company and vice versa. I got tired of all the phone calls I was making to try to straighten things out and decided to look into other options.

Imagine my shock when I learned that I could get equivalent coverage from another large company for our house and its contents, two vehicles and a million-dollar umbrella policy for a thousand dollars less than I had been paying! I guess that first company wasn't such a good neighbor after all.

Insurance companies are like cable companies; they penalize loyalty rather than rewarding it. I will never again go more than a year without reviewing our insurance coverage.

I would welcome legislative relief from our insurance prices, but I'll believe it when I see it. Perhaps you could shop your policy around and save some money.


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Re: July 1st: Get ready to pay more for auto insurance

Post by TC Talks » Wed May 08, 2019 3:13 pm

We shop ours every two years. All of our insurances.

MW what's stopping auto insurers from shopping healthcare via MCCA without changing the coverage limits? Wouldn't that accomplish the lower cost goals without diminishing coverage protections?

Also, would that mean the Auto insurance company is dictating my care provider?

Universal healthcare would resolve this very quickly.


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Re: July 1st: Get ready to pay more for auto insurance

Post by MWmetalhead » Thu May 09, 2019 7:01 pm

Imagine my shock when I learned that I could get equivalent coverage from another large company for our house and its contents, two vehicles and a million-dollar umbrella policy for a thousand dollars less than I had been paying! I guess that first company wasn't such a good neighbor after all.
Liberty Mutual generally has the best rates, especially for auto.

They can be a bit conservative, though, with regard to homeowners coverage. For example, they will only insure sump pump failure damage up to $10,000. (My beautifully finished basement would cost far more than that to restore if it were to ever to suffer severe water damage.)
MW what's stopping auto insurers from shopping healthcare via MCCA without changing the coverage limits? Wouldn't that accomplish the lower cost goals without diminishing coverage protections?
To answer your second question - yes, that would certainly help.

To answer your first question - I don't believe they are permitted to do so. And even if they were, because medical care providers know the sky's-the-limit with regard to claims covered by PIP insurance in Michigan, they more-or-less have monopolistic pricing power. This is why imposition of a mandatory fee schedule is so important!

The House passed their version of auto insurance reform early this morning, and I like their version of the Bill better than the Senate's.

The House bill contains more regulatory oversight and requires insurers to justify (via statistical analysis) their usage of non-driving factors. Unlike the Senate bill, it keeps the MCCA in place. However, like the Senate bill, it allows policyholders to purchase lesser levels of PIP coverage, if desired.

The House bill - like the Senate bill - imposes a fee schedule for medical care reimbursement. This is an absolutely critical element. I'm thrilled that both bills contain this provision.

The House bill more closely aligns with my personal "wish list," as written on the Buzzboard a few weeks back; however, both bills represent a vast improvement from the current system.

BTW, all the spin doctors whining about how Medicaid costs will soar need to shut the fuck up. The cost increase will only be about $65 million per year - and that's ten years from now! Per capita, that is only about $6.50 per Michigander, per year. That revenue can be found very easily.


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Re: July 1st: Get ready to pay more for auto insurance

Post by MWmetalhead » Fri May 24, 2019 8:54 am

Hell hath frozen over! The legislative majority leadership and Whitmer have struck a deal! :)

I'll give credit where credit is due. At the end of the day, Whitmer did the right thing.

Expect a vote and passage by both chambers later today.

I suspect pressure from Dan Gilbert compelled Whitmer to act in good faith here. Her choices were - cut a deal with the legislature or face voter passage of a proposal she might not like as much.


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Re: July 1st: Get ready to pay more for auto insurance

Post by MWmetalhead » Fri May 24, 2019 10:13 am

The compromise proposal is quite similar to the House bill.

This is great news!!!

Instead of five years of guaranteed rate relief, the timeframes will be eight years.

Restrictions on usage of non driving factors will also be imposed although not eliminated entirely (for instance, zip code cannot be used, but other geographic factors can still be used).


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Re: July 1st: Get ready to pay more for auto insurance

Post by MWmetalhead » Fri May 24, 2019 3:54 pm

After reading full details of the bill - here is a summary along with my thoughts:

- If you have health insurance that covers auto accident injuries for all household members, you can opt-out of PIP. If you have Medicare, you can opt-out of PIP. If you have Medicaid, you cannot opt-out entirely, but to help alleviate financial burden on Medicaid recipients (who generally are of low to moderate income), you are permitted to purchase as little as $50,000 of PIP coverage. For everyone else, the minimum level of required PIP coverage is $250,000.

Thoughts: I wish the $50,000 option would've been made available to everyone. Still, this is a big improvement from the current system and gives sorely needed flexibility to the folks who need it most (i.e. people of retirement age and people of modest means).

- Insurers will be mandated by law to cut "average" PIP premiums by 10% for unlimited coverage plans, 20% for $500,000 plans, 35% for $250,000 plans, 45% for $50,000 plans, and 100% for those who are allowed (and choose) to opt out. These mandatory average rate reductions will expire after eight years if Lansing takes no additional action.

Thoughts: If the newspaper article I read is accurate, I believe these provisions take effect July 2020, which is one full year prior to the medical care reimbursement caps going into effect. I found that part odd. Once the medical care reimbursement caps go into effect, insurers should have little difficulty achieving the average net premium reductions this part of the law mandates without hurting insurers' profitability.


- Instead of indexing maximum allowed medical care claims to the workers comp fee schedule, the caps will now be based on 200% to 250% of Medicare's fee schedule.

Thoughts: This move appears to be a reaction to the hospital & health care provider lobby. Nonetheless, some fee schedule is better than no fee schedule, and with time, this should considerably ease the burden on both the MCCA fund and private insurers. The claims caps will take effect July 2021, presumably to allow time for providers to "absorb" impacts. I would've preferred a more aggressive implementation timetable (say, July 2020).


- Non-driving factors such as credit score, marital status, gender, home ownership, education level, occupation and Zip Code can no longer be used to establish rates. However, usage of census tracts or other geographic considerations are still allowable.

Thoughts: I agree with prohibiting use of gender, martial status, home ownership status, and education level. I am OK with prohibiting zip code since other granular geographic distinctions are still permissible.

I am NOT okay with prohibiting usage of credit score or occupation.

My AAA premiums are 44% lower than those who fall into the worst credit scoring bracket. Why should I lose out on preferential treatment compared to someone who either chooses or is simply unable to pay his or her bills on time? Nothing prohibits insurers from using salary/wage level and payment history, though.

Payment history is still obtainable from customer history files and credit bureau reports (the credit score itself cannot be used, but other data from credit reports can still be considered). The banning of credit score usage will make the underwriting process a little more burdensome for insurers and will likely lead to minor increases in administrative costs, which in turn will likely be passed on to us.


- NEW: Auto insurers can now sell managed care health plans alongside auto insurance to help reduce vehicle preimums. The plans could include deductibles and/or co-pays and would direct injured motorists to a preferred provider network. The managed care plan would not apply to emergency care in the case of a crash.

Thoughts: Good idea. I see nothing wrong with it. Nice to have options.

- Other items: A. Anti-Fraud insurance unit started under Snyder now becomes permanent. Existing work coordination agreements between the unit and Department of Insurance and Financial Services, the AG's Office and Michigan State Policy would remain in place. B. Weekly billable hour cap for in-home attendant care would be 56 hours, but some exceptions to the limit would be allowed. C. The Michigan Catastrophic Claims Association (MCCA) and its associated statutory fee live on, but those who opt for less than unlimited PIP coverage would see a reduction in their annual MCCA fee (relative to those who have unlimited PIP coverage). The MCCA would still be permitted to adjust fee levels annually. However, the MCCA is now required to report to lawmakers the assumptions/analytics they use in establishing the fee. Additionally, a mandatory audit of the MCCA will now occur every three years.

Thoughts: I really have no issue with any of these provisions, although I think there are better ways to fund the MCCA (as I discussed elsewhere)..

SUMMARY:
The final product is a decent compromise that contains optionality for PIP coverage and imposes reimbursement caps for medical care, each of which are non-negotiable elements for what I consider to be effective auto insurance regulatory reform.

I would've preferred a little more optionality and somewhat tighter reimbursement caps, but what's been agreed upon is still a vast improvement from the current broken system. One additional option I especially would've liked is a No-Fault opt out.

The credit score ban is window dressing demanded by Whitmer to score political points, There are workarounds that insurers can utilize that will still get them to the same "place" at the end of the day. I personally see nothing wrong with usage of credit scores; those who have a solid credit record should be rewarded with lower rates.

I think the $120 to $1,200 in annual per vehicle savings that GOP leadership is claiming is realistic under this legislation is perfectly realistic. For Wayne County motorists, the savings should be even larger. It might be 2021, though, before those savings fully set in.

I will attempt to corroborate the July 2021 effective date of the medical care reimbursement caps.


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Re: July 1st: Get ready to pay more for auto insurance

Post by MWmetalhead » Fri May 24, 2019 8:39 pm

Credit goes to MLive:
Another major shift in the deal would set a fee schedule for what health providers can charge when treating auto-related injuries.

Starting July 1, 2021, a fee schedule based on a percentage of Medicare reimbursement will be phased in, beginning at 200 to 240 percent of Medicare rates, dropping to 195 percent to 235 percent of Medicare in 2022 and to 190 to 230 percent in 2023.

Hospitals that serve a larger portion of Medicaid recipients are eligible for slightly higher rates under the plan.
https://www.mlive.com/news/2019/05/sena ... icies.html


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Re: July 1st: Get ready to pay more for auto insurance

Post by MWmetalhead » Sat Jun 08, 2019 8:12 am

Whitmer's approval numbers shot up by about 12% following the signing of no-fault reform into law.

The people by & large are happy Lansing finally did something!!!

Also, an unscientific poll conducted by WXYZ in Detroit during one of its newscasts immediately following passage came back with 63% of viewers in favor and only 37% opposed.


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Re: July 1st: Get ready to pay more for auto insurance

Post by WZRC 1067 » Fri Jun 14, 2019 6:37 pm

My parents split there time between Michigan and South Carolina, I'm trying to talk them into declaring residency in South Carolina. As, car insurance isn't so expensive and they don't tax SS benefits(I don't think).

The Insurance costs have been out of hand for a long time, we shall see if this makes a difference.


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