New DIFS Report on Auto Insurance Reform Is Limited, Incomplete and Flawed
On December 1, the Department of Insurance and Financial Services (DIFS) released the report, “The Impact of Michigan Auto Insurance Reform.” It is available on their website, and can be read in its entirety here. The basic findings of this report are that the reforms have reduced the cost of auto insurance to Michigan drivers an average of $357 per registered vehicle (or about $30 per month) and that while access to care was initially disrupted, the impact seems to have subsided based on the number of complaints filed to DIFS and their reported rate of resolved cases.
The report is significantly limited, incomplete, and flawed. It does not represent what drivers are actually experiencing when they get their insurance bill and it does not represent the experiences of injured people seeking care. Ultimately, the report serves one purpose only: give the insurance industry sound bites to perpetuate the scam the 2019 law created and give cover to those that refuse to view the 2019 in any other way than a failure at best, and a tragedy at worst.
Issue of Affordability
Based on the public comments by those that championed the 2019 law, the primary objective was to make auto insurance in Michigan more affordable. All aspects of the law – PIP choice, fraud authority, limits to the assigned claims, medical fee schedule, utilization review, etc. – were to be seen as pieces to the ultimate aim of reducing the cost of insurance to Michigan drivers.
By this standard, this report clearly underscores the ultimate failure of the law. That is, unless the drafters of PA 21 and those that stood around Governor Whitmer on Mackinac Island for the grand signing, envisioned success as being a savings to Michigan drivers of $30 per month 6+ years later. But even this assumes the ultimate findings of the report to be an accurate portrayal of what Michigan drivers are experiencing, which clearly is not.
An overall reduction in insurance rates for Michigan drivers is not congruent with the results of a state-wide poll conducted by MRG in the spring of 2025 which found less than 8% respondents reporting their auto insurance is less expensive, while over 60% reported it being more expensive with nearly one in three reporting it as “much more expensive.” The findings of this report do not reflect the actual experiences of Michigan drivers. The cycle of press releases by the Insurance Alliance of Michigan (IAM) and DIFS over the past several years touting the success of the reforms have almost been like a sleight-of-hand trick, trying to convince Michiganders that the reality they are experiencing when they continue to see their auto insurance premiums skyrocket is just an illusion. Similarly, this report just doesn’t align with reality.
Perhaps, however, the data provided in the report on the reduction in cost to Michigan drivers is a result of a flawed method or leaps in assumptions? Doug Heller makes the case for this in CPAN’s press release. He states “In footnotes and technical appendices, we can see the insurance burden on drivers continues to be high and is not relieved by 2019 reform law.” He goes on to say “When you have to make adjustments based on assumptions to prove your points, you might not have a good point.”
It is important that if policy makers want to use this report to support their position that the reform law is working, it is important that they go beyond the headlines and read the small print to be sure they are confident in the conclusions being made. It is also important that they reflect on their own experience and that of their friends, neighbors and constituents – does it feel like the auto no-fault reform law of 2019 has made auto insurance more affordable?
Issue of Access to Care
The report almost entirely relied on the DIFS complaint process and DIFS complaint reporting to determine the degree to which accident victims have been able to access care. To their credit, the authors state “it is not possible to conclude definitively that there are no or limited access to care impacts on post-reform auto accident victims from complaint data alone.” (Side note – the phrasing of that statement certainly seems like it is trying to validate a claim that there has been no impact to access to care rather than an objective starting point without a distinct position being trying to approve or disprove. For example, couldn’t that sentence have read “it is possible to conclude definitively that there is an impact on post-reform auto accident victims from data beyond complaint data” or rather “we do not have enough data to comment on the impact of access to care on post-reform auto accident victims”).
Nevertheless, the report makes clear that relying on complaint data from DIFS alone is not a reliable or valid method for determining if there are challenges to access to care. It is disappointing that it appears the report’s authors did not attempt to go beyond the DIFS complaint reports. There was never any attempt to incorporate data from post-acute providers or the experiences of people injured in car crashes. Perhaps this is because the report was “commissioned by DIFS solely for the use and benefit of DIFS and the Michigan Legislature.” Perhaps the authors weren’t confident with expanding their search for data beyond what was provided to them by DIFS; or perhaps they were constrained by the parameters set forth by the funders of the report.
Whatever the case may be, if that effort were to have been made and the report had attempted to go beyond the flawed scope of DIFS complaint data alone and incorporated the quantitative and qualitative experience of long-term care providers or patient advocates, a clear and definitive statement could have been provided: the non-Medicare fee schedule has created significant barriers to access to care for the most vulnerable and severely injured people.
There have been hundreds of stories over the past several years detailing the crisis in care. An archive of articles can be viewed here. We have also heard testimony in legislative hearings from providers, crash survivors, family members and patient advocates about the challenges now facing severely injured people receiving the care they need. For example, in hearings before the Senate Insurance Committee in October 2023:
One home care company owner provided written testimony that they had to close their business entirely, stopping services for over 100 patients and laying off 565 employees.
Another home care provider testified with an example that in one week, they had to turn away 10 patients seeking their services.
A residential care provider testified that up to that point in that year alone, they had denied services to 27 referrals for patients needing their level of care and expertise.
If approached, MBIPC could have provided the report writers with access to dozens of other providers with similar data. In addition, the experiences from independent case managers – those individuals at the center of working to get injured patients the care they need – could have been shared.
This past fall, MBIPC surveyed independent case managers – including MBIPC members and non-members – to capture their experience working with people injured after 2019. Thirty-two respondents participated with the following results:
Asked to describe the degree to which finding appropriate services for severely injured people is after the 2019 law compared to before:
81% much more difficult;
16% somewhat difficult;
0% exactly the same
0% somewhat the same
(3% were not case managers before 2019).
Asked from their experience, what is the most common reason given to them from a home care or residential care program when they are not able to accept their referral for an injured person:
59% Reimbursement level based on fee schedule is too low to provide the needed care for the individual
38% The organization is no longer accepting auto no-fault cases because of the changes to the 2019 law
The case managers were also asked qualitative questions as well to share their experience, below are a couple of quotes that encapsulates the perspectives shared in the survey. You can view the full list of these responses here.
“My worst experience was with my client, who was a quadriplegic, who was living a quality life in her own home with 24-hour care. When the law changed, the home care company was no longer comfortable providing care because it did not know whether it would be paid. My client was sent to a nursing home, where she quickly developed stage four pressure wounds and became septic. She died within 4 months. This was preventable. Nursing homes are not equipped to care for people with catastrophic injuries.”
“Many services are no longer available due to lack of reimbursement. Care is still ‘available’ but often not provided due to reimbursement concerns. Additionally, the lack of reimbursement has led to decreased quality of care and care options.”
"Since 2019 access to care has exponentially diminished. Prior to the reform, individuals involved in motor vehicle accidents had a better chance to survive, improve and live a productive life. With limited access to specialized care, recovery gains are decreased, not to mention many individuals have no choice, but to live in unsafe situations (lack of modifications, appropriate care, supervision, etc.). This increases the chance for life-threatening complications. With the recent cuts to Medicaid, it would not be unreasonable to anticipate access to appropriate care and services to become even more of a challenge."
“The 2019 law change has substantially impacted access to care for catastrophically injured clients. Unlimited benefits cannot be seen truly as unlimited when there aren't enough providers who can accept the auto no-fault insurance due to low reimbursement rates from insurance companies.”
If asked, MBIPC – a leading voice on the issue of access to care since the enactment of the law – could have provided the report’s authors with access to providers, crash survivors, families and advocates that would have led to a more complete analysis and a basis for a more clear and convincing conclusion. And the report would better represent the actual experience of crash survivors, their families, and the medical professionals wishing to provide them with the services they need.
Policy makers will most certainly be provided with a cliff’s notes version of this report from the insurance industry with cherry-picked lines and incomplete summaries of the findings. It is important that if this report is to be utilized for decision-making purposes, that the full report be read and the fine details paid attention to. If that is done, MBIPC is confident a clear conclusion will be reached – the report does not represent the experiences of car drivers or crash survivors. Therefore, the focus of the current Legislature needs to be on restoring access to care for catastrophically injured patients. MBIPC is optimistic that the current leadership in both chambers and Gov. Gretchen Whitmer ultimately understands the importance of a narrow solution and the need for legislative action.
Sincerely,
Tom Judd
Executive Director
