Addressing Misinformation Campaign by Insurance Alliance of Michigan
Addressing Misinformation Campaign by Insurance Alliance of Michigan
The onslaught of misinformation from the Insurance Alliance of Michigan (IAM) continues. Once again, they deny any problems in access to care exist and are pushing back against proposed solutions without offering any alternative solutions. And they do so with fear tactics of raising insurance premiums for Michigan drivers. Their misinformation campaign must be fact-checked.
Who is IAM?
The Insurance Alliance of Michigan (IAM) is the lobby group for large insurance companies. Their special interest is not protecting consumers but advancing public policy that increases the profitability of their members.
They told lawmakers in 2019 that the reforms would lower costs and would not impact the care of catastrophically injured people. They continue to deflect the fact that insurance rates continue to rise and continue to claim that there are no problems for consumers needing to access care.
Claim #1: The relatively low number of complaints to DIFS from providers indicates that there is not a problem.
Fact: There are several legitimate reasons why providers do not make formal complaints to DIFS or why DIFS doesn’t have a high count of complaints:
Survivors, providers, and their attorneys see this as a waste of time. These entities view DIFS as deferential to insurers as they have stood by and denied that any access to care issues exist.
The vast majority of survivors injured prior to 2019 are already in litigation therefore DIFS does not intervene.
Survivors injured after 2019 have no legal standing for a DIFS complaint. Insurers are acting within the law when cutting their reimbursements by 45%.
Claim #2: Senate bills create a new fee schedule with dramatically higher reimbursement rates for a broad range of products and services.
Fact: The post-acute fee schedule in the Senate bills replaces the absurd cut of nearly 50% with a reasonable fee schedule with reimbursement levels consistent with what other funding sources pay for the same services.
The notion that IAM continues to call the current system “reasonable” is evidence that they have no intentions of accepting any change.
Medical providers will not get rich off no-fault cases. They will simply be paid a reasonable rate that allows them to provide service.
Claim #3: Senate bills 530, 531, and 575 would raise premiums by $1.2 billion.
Fact: IAM and DIFS have had no problems with billions of dollars in rate hikes over the last two years, but they now protest changes that will ensure access to care and pass on additional costs to consumers.
DIFS approved over $1 billion in rate increases in two consecutive years. The concern over rising premiums so that consumers can access care is disingenuous – it blames crash survivors and medical providers.
$1.2 billion in increases = an average of $171 per driver per year, or $14 per month.
Claim #4: Costs associated with fixing the current system that limits access to care would have to be passed on to drivers.
Fact: Insurance companies have control over setting premiums. These are the same companies that can afford billions of dollars in advertising money and compensation for their corporate leaders in the millions of dollars.
Despite record profits, Fortune 500 companies blame their consumers and small business healthcare providers for rising costs. This is about greed and shifting blame away from the true culprit of high insurance rates – the insurance companies themselves.
Claim #5: Michigan has the highest required auto insurance benefits of any state in the country in both medical and liability coverage, and we remain the only state with an unlimited PIP option.
Fact: The majority of drivers continue to choose to pay for unlimited benefits because they value the promise of lifetime coverage; however, these are currently junk policies.
Without changes to the reimbursement system, these benefits are worthless because the care required is not accessible.
Reimbursement is lower than the cost of care. SB 530 restores access to care through reasonable rates that can withstand scrutiny and stack up with other benchmarks and funding source reimbursement levels.
Claim #6: National inflation has already impacted some portions of your auto insurance policy.
Fact: IAM recognizes the impact of inflation on aspects of insurance costs, but in turn, says it is “reasonable” to cut reimbursement levels for medical and long-term care services by nearly 50%
The hypocrisy is stunning.
Claim #7: Proposed legislation gives more money to middlemen – not caregivers.
Fact: Senate Bill 530 implements a reasonable fee schedule with reimbursement rates consistent with what other funders pay.
For example, Veteran’s Affairs reimbursed in-home registered nurses in 2023 at $130, Senate Bill 530 reimburses in-home registered nurses at $84.86.
The examples used by IAM with nursing wages are blatant manipulation of data.
Anyone who has run a business understands that wages are only one element of the cost of recruiting and retaining high-quality talent. For IAM to use this data this way demonstrates a lack of respect for the intelligence of Michigan lawmakers.
Nurses who provide in-home care for catastrophically injured patients do so in a one-on-one environment with complex needs requiring enhanced expertise and training.
Claim #8: The Legislature can control the cost of Personal Injury Protection (PIP) costs.
Facts:
Insurance companies have control over setting premiums. These are the same companies that can afford billions of dollars in advertising money and compensation for their corporate leaders in the millions of dollars.
Passing the buck to the legislature and blaming their injured consumers and honest and ethical medical providers demonstrates their greed to increase profits and their lack of responsibility to their consumers.
The Legislature has a duty to ensure the policies being sold by insurance companies provide the benefits consumers are paying for.
The Legislature has the power and responsibility to end the Crisis in Care by implementing the reasonable fee schedule in Senate Bill 530.
IAM has one interest – protecting their clients and advancing public policies that will increase their profits. They do this by shifting blame to their injured consumers and the ethical medical providers who want nothing more than a reasonable system of reimbursement. IAM’s partners in Lansing have been enablers of this irresponsible behavior. IAM continues to spread misinformation and manipulate data to cause confusion and fear – and they do so without acknowledging the need for a narrow fix to ensure access to care, and they certainly do so without offering any alternative solutions.
It is time for the Legislature to act—to be on the side of their constituents who want lower insurance rates without gutting the medical benefits they choose to pay for. It is time for the Legislature to pass the reasonable solutions in Senate Bills 530, 531, and 575 and end this sad chapter in our state’s history.
Tom Judd
Executive Director
