Rebates a shameful legislative promotion

Michigan drivers receiving their $400 auto insurance refund checks this month had better notice the blood that’s been spilled on their money.

Not that we didn’t deserve a break from the highest auto insurance rates in the nation, but we all should know exactly who our legislators took that money away from to fatten our pocketbooks.

Last week, Gov. Gretchen Whitmer and the Michigan Department of Insurance and Financial Services confirmed that the Michigan Catastrophic Claims Association transferred $3 billion in surplus funds to Michigan auto insurance companies to send refund checks to their customers.

The money will go to eligible auto owners in refund checks or ACH bank deposits no later than May 9.

The State Legislature created the MCCA in 1978 as a non-profit, unincorporated entity to ensure that permanently disabled auto accident victims and the families who depended on them would be financially supported for the remainder of the accident victims’ lives.

We, as citizens of the only state in the country to have such a program, should be proud of the commitment we made – for the last 44 years, at least – to care for some of the least fortunate, most catastrophically injured, among us.

That lifelong promise was torn to shreds by these state legislators 10 months ago when they reduced the lifelong care reimbursement for catastrophically injured accident victims by nearly half. It’s no surprise that it came amid the election-year campaign drumbeat of saving taxpayers money.

“Our bipartisan auto insurance reforms have significantly lowered the cost of auto insurance for families,” crowed Whitmer. “And starting this week, thanks to the reform, Michiganders are getting $400 refund checks per vehicle for every insured driver, putting money in people’s pockets. We will continue working to save Michiganders money so they can pay their bills and put food on the table.”

The deception of those words is apparent when viewing the other sources from which Whitmer and the Legislature could have gotten the money not only to provide tax relief, but also to fulfill the now-hollow lifelong promise made to catastrophic accident victims 44 years ago.

Last week, the governor vetoed Senate Bill 768 that, among other tax changes, would have reduced the personal income tax rate back to 3.9 percent from 4.25 percent. The veto came after Whitmer outlined her “Mi Money Plan” which, if approved by the Republican Legislature, would suspend the 6 percent sales tax on fuel and the elimination of retirement taxes for some seniors and an increase in the Earned Income Tax Credit for low-income earners.

Easier to stick it to the small and desperate group of catastrophically injured victims who had believed they could depend on legislative leaders to honor that commitment to care for them. Whitmer and the Legislature have been battling over a $7 billion surplus in the upcoming 2022-23 fiscal year budget. They’re looking for how to best to maneuver that pot of money to give taxpayers more relief in an election year. The catastrophically injured apparently just don’t fit into their political plotting.

We do have a problem with auto insurance in this state.

In 2017, the average cost of a personal injury protection claim in Michigan was more than six times the national average, with costs increasing nearly twice as fast as other states, says the Insurance Research Council.

“Bodily injury liability claims are becoming more frequent,” reports the IRC. And bodily injury liability claims also are becoming more frequent due to attorney involvement in auto injury claims that contribute to the costs. The increase in claims is partly due to a 2010 Michigan Supreme Court decision lowering the threshold for determining when an individual can seek compensation for “pain and suffering,” caused by a crash.

The IRC report also indicates that Michigan has a large amount of fraud in the no-fault system, with people declaring their medical issues were more serious than is reality – but why not when the MCCA had more than $20 billion in its coffers with no oversight from state legislators?

The MCCA became the prime culprit in auto rates soaring out of control due to the fact that legislators failed to put any financial controls on what providers charged for their services when they created the association in 1978.

So, rather than admitting to the problem and making some adjustments in provider payments, legislators let the program drive up rates to the point that something had to be done.

And now these same legislators say nothing can be done.

That’s what State House Speaker Jason Wentworth, R-Farwell, told family members of catastrophically injured victims and their families when they visited his office in March 16 in hopes of a meeting before he called Michigan State Police to have them removed.

Wentworth is one of a few key Republican leaders who have been blocking efforts to fix the law.

The bills introduced by several legislators to prevent thousands of people from losing their care this year never got even a hearing.

“(We) spent an entire year looking at every idea that was proposed and working with our committee on options,” Wentworth told The Detroit News. “They all either moved us backward toward the old status quo or put the savings and refund checks for Michigan drivers at risk.

“At this point, it’s time to move on.”

Taxpayers look to their officials to solve problems, yet our state officials fail to deal with the real issues – then they walk away from the promise they made to these victims.

And so the issue remains: Who is going to care for these patients? Due to this Lansing edict, long-term caregivers say hundreds of people could end up in hospitals, homeless shelters, or ill-equipped nursing homes – or lose their lives altogether.

Recently, a coalition of faith groups held a special service at St. Michael’s Episcopal Church – less than seven miles from the state Capitol – for those car crash survivors who died since losing the care that had been keeping them alive.

“We pray for all of us gathered here – especially for the families and the loved ones of those that have departed this life,” said Rev. Timothy Flynn of St. Michael’s. “We pray that our legislators and our governor be blessed with courage and a thirst for justice.”

It’s time for citizens to realize what’s happening to these victims and to demand action from our elected officials who have failed to fix a system that could be efficient, cheaper, yet still caring. Lawmakers were warned in 2019 that these no-fault changes would cause the collapse of the care industry that had existed to care for these crash survivors – and now that collapse is occurring.

It’s also time for citizens to realize that this situation is yet another example of our state and nation being ruled by a troubling cartel of insurance companies, lobbyists, and legislators, all working to extort money from programs and people who protect us all – especially the least among us.

The day after Speaker Wentworth closed the door on catastrophically injured families and on reform, one of Michigan’s largest remaining long-term care providers, 1st Call Home Healthcare, announced it would close by April 30, leaving several dozen more catastrophically injured patients without care.

These victims have become political pawns while the rest of us need to realize that there will be little or no care provided if any of us ever become a victim. It’s a sad commentary on the inability of our state and our elected officials to come up with a reasonable solution to such a serious issue.

The refunds literally are blood money. Our governor and state legislators broke faith with catastrophically injured crash victims who paid into a system that has now abandoned them. The rest of us better hope we don’t end up in any crashes that injure us to the point we desperately need specialized care since the industry will no longer exist to provide that level of care.

Oh, but we do have these checks – and blood on our hands.

There’s only one way we know to wash our hands now and that’s to flush these legislators out of office.

When the next election rolls around, remember how cheaply they valued our votes – and the lives of those who were promised coverage for catastrophic injury – and make it a clean sweep.

Fred Jacobs, CEO J-Ad Graphics, Inc.