In addition to the proposed amendment to Michigan's No-Fault Act that is presently on the floor of the State House of Representatives awaiting a second reading, another bill that poses to decrease reimbursements has cleared the Michigan Senate's Insurance Committee. Senate Bill 288, proposed by Senator Virgil Smith, involves limiting no-fault benefits for injured residents of Detroit and potentially other large cities in the State of Michigan.
As proposed, cities over 500,000 in population (only the City of Detroit, with a U.S. Census-estimated 2014 population of 680,250 would qualify) or a city that can demonstrate that 35% or more of the city's residents who regularly drive a vehicle do so without automotive insurance would qualify. The bill's sponsors admit that it is not known which Michigan cities other than Detroit would qualify as 35% or greater uninsured, due to lack of data.
Under the bill, qualifying cities would be able to cause their residents to have access to particular insurers who could issue "qualifying no-fault policies." Unlike the current no-fault law, which requires that insurers provide unlimited coverage for reasonable charges incurred for medically necessary products, services for an injured person's care, recovery or rehabilitation, a qualifying no fault policy would have a minimum aggregate coverage amount of $275,000.00 for catastrophic injuries.
As currently proposed, the bill would limit coverage for the victims of catastrophic car accidents to as little as $275,000.00, which would have a significant negative effect on many healthcare providers/suppliers and their patients.
Now that the bill has been passed by the Senate Insurance Committee, it needs to be passed by the Senate as a whole before being sent to the Michigan House of Representatives for consideration.
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