Michigan's proposed change in No-Fault Auto insurance needs close and careful scrutiny

Op-Ed by Fred Nader

LANSING, MI - The desire for our Legislature to reduce auto insurance coverage and regulate medical provider billing rates is based on a flawed belief that the current system is non-sustainable. But... what if the data being provided by the MCCA is not statistically correct? What if the actuarial equations that the MCCA is using to forecast future liabilities includes flawed assumptions?

The MCCA is the only source for financial forecast information on liabilities and the MCCA wants the current law changed. Is it possible that the MCCA is using flawed assumptions to calculate future risks that could be overstated? What if this were true? What if the MCCA assumptions for future liabilities included a belief that injured victims would require benefits for 105 years from the time they were injured. This sounds ridiculous... but what if it is actually true???

Future forecasts need to be calibrated by past data. Looking at the 2010 financial data the MCCA received revenue of $1,200,000,000 and paid benefits of just over $800,000,000. This represents a $350,000,000 excess revenue over benefits. If we simply divide excess revenue by paid benefits we quickly see that the fund was over insured for 2010 by 43.75%. Now let's look at total amount paid over a 37+ year period.... and we find that the fund current net revenue of over $13,000,000,000 is substantially greater than total paid benefits over the entire 37+ years of existence.

Before this young, 1st term group of legislators simply accept the provided data as true, they need (no they must) demand transparency from the MCCA on how their forecast of gloom and doom was generated. If someone walked up to you and told you that you were suddenly broke would you throw yourself out of a nearby window or check your bank account?
 

Finally, adding government oversight to the medical industry for a privately funded group insurance policy is a slippery slope that is not consistent with Republican principles. Do we also regulate how much the insurance providers can charge? How about regulating the trial lawyers who currently can charge up to 33% of law suit judgments? If we are removing the tort limit... should we not also reduce the maximum amount that trial lawyers can charge? As you can see... this quickly gets to ridiculous.

The sky is not falling. Our legislators simply need to stop listening to Chicken Little and check the accuracy and authenticity of data that predicts gloom and doom to a program with a 37 year history of successfully serving the People of Michigan. Michigan's current no-fault law is Pure Michigan..... don't try to fix things that are not broken. Instead... fix the economy, balance the budget and create jobs!

The proposed HB4936 also includes a tricky piece of legislation where an appropriation (spending of money) is added to the bill resulting in the bill not being subject to a public referendum. Really????? so these legislators want to pass a bill that not only changes our incredible auto insurance but they want to add trickery that would prohibit We The People from exercising our Constitutional right to vote! Previous attempts to reduce or eliminate our current no-fault coverage has gone to a public referendum twice. Both times, We The People voted by a 60/40 ratio to preserve and maintain the current law.

This is America and the right to a public referendum should NEVER be restricted by our elected politicians.

Call, write and email your Michigan House Representative and State Senator. Tell them to FIX THE ECONOMY, BALANCE THE BUDGET AND CREATE JOBS and not to spend time trying to fix things that are simply not broke. Do not allow them to remove our collective right to a public referendum. Do not allow them to pass ridiculous laws that create more government to change and oversee well run private programs.