News & Media

A Look at Auto No-Fault Reform in 2019

Wednesday, February 6, 2019


In the eyes of Republican legislative leadership, auto no-fault reform is the number one legislative issue for 2019. Not coincidentally, the first bill introduced in the Senate – Senate Bill 1 – will be the vehicle bill for ensuing no-fault reform. That bill was introduced on January 15, 2019, by Senator Aric Nesbitt (R-Lawton). Several other bills have been introduced that may be under consideration as deliberations unfold around a larger package.


Senate Bill 1 was referred to the Committee on Insurance and Banking, chaired by Senator Lana Theis (R-Brighton). The multi-section bill includes intent language, which will be filled in as priorities are identified. One section of the bill specifically delineates the goal of allowing individuals 62 or older to opt-out of personal injury protection if they have lifetime health care benefits.


Discussions around no-fault reform are ongoing, and the sponsor has yet to assign any concrete proposals to his canvas; however, we are hearing that Senate Republican leadership intends to have a PIP choice bill on Governor Whitmer’s desk. Chairwoman Theis has not given an indication of a timeline as far as committee consideration but we are hearing there will be a robust committee process; no workgroups; and that it would be reasonable to expect to see some action on a proposal in the Senate prior to the summer break. The committee held an organizational meeting on February 6, which included a presentation by the Citizens Research Council on the history of no-fault insurance in Michigan.


On the House side, a new committee process was established that will require most committees to send bills to the Judiciary Committee, Appropriations Committee, or the newly-formed Ways and Means Committee, depending on jurisdiction, for additional vetting before they are sent to the floor. House leadership also set up a new special Select Committee on Reducing Auto Insurance Rates. Interestingly, the committee, chaired by Representative Jason Wentworth (R-Clare), will be able to circumvent the new process and send legislation directly to the House floor.

As far as consideration of no-fault is concerned, the House leadership has stated they have a blank slate in terms of how best to address the issue of reducing auto rates. No bill will be introduced until the select committee has a solid framework for reform and hopefully, a consensus. We are hearing that all bills being introduced in the House at this time will be referred to the House Insurance Committee and will not be considered by the select committee. However, any proposed policy might be considered and incorporated into the select committee’s proposal. As far as timeline in the House, the stated goal was to have this issue addressed before heading into the 2020 campaign season.


How Governor Whitmer will approach no-fault reform is also unclear. In the 2018 election, the Governor was endorsed by Detroit Mayor Mike Duggan, a vocal proponent of a no-fault reform proposal that includes tiered options for medical care, among other things. We know that on this aspect of no-fault reform they are not aligned as Whitmer maintained during the campaign that she wants to maintain lifetime benefits. In contrast to the legislature, the Governor has not indicated in the early days of her administration that auto no-fault is a priority issue.


Finally, the 800-pound gorilla in the room is the 2020 November general election and the looming threat of this issue going to the ballot. This option will also play heavily into the debate.



MSMS Activity

Auto no-fault reform is one of five legislative priorities identified by the MSMS Board of Directors for 2019. MSMS will continue to work closely with its partners in the Coalition for Protecting Auto No-Fault (CPAN) as no-fault proposals are considered. At the same time, MSMS staff plans to vet various proposals through a group of physician member volunteers to ensure the physician voice is at the table and MSMS is proactive in the legislative arena. The policy areas that are likely to draw the most attention from the medical community will be personal injury protection choice; transparency and addressing fraud; as well as fee schedules. Early indications from Republican leadership suggest that a final no-fault package is likely to include concessions from all players; thus, we will need to balance the development of creative, proactive solutions with conversations around areas where we find appropriate compromise.