by Gongwer News Service
May 2, 2008

There’s no risk in saying that insurance issues dominated the legislature over the past week — and even less risk in saying insurance will remain a major issue over the next several months.

Auto insurance and health insurance were the topics on the table as the “invisible bankers” backed some bills, opposed others and stood athwart others as legislation worked its way along the legislative highway.

The big headline was the Senate’s version of at least part of a package dealing with Blue Cross Blue Shield of Michigan. Early in the week, Sen. Tom George (R-Kalamazoo) said no Health Policy Committee would be held at its usual Wednesday time so discussions could continue on the issues in the bills (House Bills 5282–5285). Things may be ripe for picking in a week’s time, Mr. George, the committee chair, said.

A day later though, notice of a committee meeting was posted and new substitutes for HBs 5282 and 5283 put before the committee (because Attorney General Mike Cox had asked for information on BCBSM and its Accident Fund subsidiary, the other two bills were held up). Political mechanics can be frustrating, so the committee itself didn’t act on the bills, but the Senate passed the new substitutes over the objection of most Democrats, who wanted more time to review the proposals.

When the Blues package began in the House last fall the argument the health insurance company and its allies made was that some controls had to be in place to ensure that individuals losing health insurance from their companies could afford to find it in the individual market. As the proposals worked their way through the Senate, that concern was addressed less and less as opponents charged the bills were simply a way for BCBSM to grab more of the health insurance market.

The bills the Senate passed, and the House must dispose of, have now evolved more into amending the basic operating procedures for BCBSM and, to a lesser degree, its competitors, commercial insurance companies. There are certainly consumer protection provisions included, but the main concession to the individual market question is a requirement that the state study whether a high-risk pool for individuals should be created.

Now back in the House, how the differences will be resolved is still uncertain, as well as by when. Reportedly, Governor Jennifer Granholm told legislative Democrats a few weeks ago the issue could wait until fall to be resolved (one wonders if her sudden sojourn into the hospital for emergency abdominal surgery has altered her perspective on health insurance at all).

But as the Blues issue achieves a new plateau, here comes automotive no-fault insurance. For decades to the complaint that automotive coverage is too expensive has largely come the answer: it’s because Michigan requires unlimited medical coverage. Every time there’s been an attempt to change that requirement, the voters have shot it down.

Over time, auto insurance rates in Detroit and other urban areas have grown exponentially. As one by-product, a lot of drivers are finding ways to get around the insurance requirement.

So the tack this time is to combine concerns about high cost and large numbers of uninsured motorists together in a way to bring down rates. Instead of simply eliminating the unlimited coverage and setting a fixed amount on medical coverage (a proven unsuccessful idea thus far), the new proposal calls for allowing motorists to decide how much personal injury coverage they want to carry, from $50,000 to unlimited.

The savings by taking a smaller amount should help a number of people afford insurance. Sen. Alan Sanborn (R-Richmond), the Senate sponsor of the package (Detroit Democrat Virgil Smith III is the House sponsor), fired a shot at Sen. Martha Scott (D-Highland Park), who for more than four years has risen in the Senate to urge action on legislation to cut insurance rates.

Ms. Scott should support this new package, Mr. Sanborn said, which will cut insurance rates through market reforms and not through the socialistic idea of boosting rates in one place to adjust them lower in others. But Ms. Scott fired back that the proposal might leave people without adequate medical coverage, especially if they do not have health insurance. Sponsors have said individuals would be able to sue to recover medical costs (though whom someone sues if he/she hits a tree is an open question), but fears about motorists having enough coverage is one hurdle sponsors will have to leap in order to win on the issue.

Initially, there was speculation the proposal might be headed for super fast action in committee. Anticipate relatively quick action, as the cost of auto insurance is an ongoing complaint.

For nearly 50 years in Michigan, Gongwer News Service has provided independent, comprehensive, accurate and timely coverage of issues in and around Michigan’s government and political systems. For subscription information, including a free trial, visit Gongwer online.