Farmington Area State Rep Concerned about No Fault, Workers' Comp Bills

Two bills under consideration now by the Legislature have state Rep. Vicki Barnett (D-37th District) concerned.

In her second term representing constituents in Farmington and Farmington Hills, Barnett said Monday that changes to the state's no-fault auto insurance system and to the state's 100-year-old workers' compensation law could "dramatically affect people."

The current no-fault legislation has every vehicle being charged $145 to fund coverage for catastrophic health care claims by accident victims, and medical benefits are provided for life. The Michigan Catastrophic Claims Association fund, a nonprofit fund founded in 1978, reimburses medical claims in excess of the $500,000 covered by insurance.

Barnett said the bill aims to lower the amount of that protection to $250,000 and give motorists the option to purchase additional coverage.

"The industry is saying we should give people a choice about how much insurance they want," Barnett said. "But if they choose the cheapest amount and then have a catastrophic accident, their care will be paid for by every Michigan citizen through Medicaid. It would become a burden on our hospitals."

She said insurance companies have estimated the change would drop Michigan insurance premiums by 40 percent, but she doesn't believe that's possible, given that lawmakers are talking about only the catastrophic claims fee. WDIV-TV, Channel 4, recently reported that Michigan's auto insurance rates are the highest in the nation, with an average annual premium of $2,541.

According to information posted on the MCCA's website, the 2011-12 premium went up $1.91, or 1.3 percent, to cover the costs of future liabilities. The organization estimates that about 850 people will suffer catastrophic injuries in car accidents each year, and the MCCA paid out $897 million — about $128 per insured car — on claims in 2010.

Barnett said the argument that reducing the cost of the catastrophic collision fee will make insurance more affordable and encourage more uninsured motorists to pony up doesn't hold water. She said the real affordability issue lies in the cost of collision coverage, which is far more expensive than the catastropic claims portion of insurance bills.

"It's a solution in search of a problem," she said. "It's a bad bill."

Virtual reality in workers' compensation

Barnett believes that another bill, designed to change the state's 100-year-old workers' compensation law, has flaws but can be fixed in a bi-partisan legislative work group. Introduced by Lake Orion state Rep. Bradford Jacbosen (R-46th District), the bill would change how employers are required to treat employees who are injured on the job in a number of ways, including these provisions:

• Employers are now required to pay for medical care, with the employee seeing the employer's physician for the first 10 days. The bill would require employees to see their employer's physician for 90 days. Barnett said the employee's physician has a better handle on that individual's health care, and keeping him or her out of the picture "could cause irreparable harm."
• Barnett said employers now pay the difference in wages if an injured employee returns to a lower-level job within the company. She said the bill would allow employers to base that difference on a job available to the employee anywhere in the world. If the "virtual job" for which the employee is qualified pays more than the job available within the company, that could lower the amount the employee receives.
• Injured workers who are eligible for retirement would have their benefits reduced by the amount of their pension, even if they have no intention of retiring.

"Companies are arguing, and rightly so, that the workers' compensation law has not been updated to account for advances in medicine," Barnett said. "There are things we need to do to fix the law. ... We're all in agreement on those things, and hopefully, through the work group, we'll come to an agreement."