PIP compromise bill might be on the way

Yesterday, State Rep. Pete Lund, R-Shelby Township, introduced a bill that is far less Draconian than the no-fault reform bills introduced in the Senate last March. Because the bill represents more compromise, it may have a far better chance of making its way to Gov. Snyder’s desk.

The bill, HB 4936, like Senate Bill 293, allows insurance buyers to purchase less-than-lifetime personal injury protection. But SB 293 allows coverage as low as $50,000, which critics have aptly noted doesn’t go very far in treating catastrophic injuries. The house version’s lower limit is $250,000, which the Insurance Institute of Michigan has said is enough to cover nearly 99 percent of all no-fault claims, and is five times more than than in New York, the state with the next-highest minimum behind Michigan’s lifetime coverage.

Lund’s bill would also cap PIP coverage at $5 million, which is causing alarm among lawyers who strongly argue that the unlimited lifetime PIP coverage is the cornerstone of Michigan’s no-fault system. But insurance industry leaders have for years been saying that lifetime benefits are crippling Michigan’s no-fault system, and create such a big and unpredictable weight on the system that no-fault is unsustainable.

The house bill includes other compromises, requiring a give-and-take among the bar, insurance carriers and health care providers. Like SB 294, it would set a fee schedule for providers identical to workers’ compensation. Currently, the fees paid by some no-fault insurers are astronomically higher (as much as tenfold) than workers’ compensation — the second most generous fee schedule in the state, richer than Blue Cross and Medicare.

It would also eliminate some of the dread over what could happen if the now-conservative Michigan Supreme Court finds the right case to overturn McCormick v. Carrier, and return to a serious impairment threshold identical, or more stringent, than Kreiner v. Fischer.

Be sure to read Monday’s Michigan Lawyers Weekly for full coverage of the proposed reforms.

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