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Auto insurance bill faces another contentious hearing in State House

Auto insurance bill faces another contentious hearing in State House (FILE Photo)

LANSING, Mich. (SINCLAIR BROADCAST GROUP) - The battle lines are being drawn in Lansing as lawmakers discuss a controversial plan aiming to reduce your auto insurance rates.

Speaker Tom Leonard and Detroit Mayor Mike Duggan's plan had another heated committee hearing Thursday, but the Leonard-Duggan plan is getting closer to going to the House for a final vote.

However, hospitals and medical associations are fighting back with everything they've got.

The topic of how high your auto insurance rates are was on full display in the House Insurance Committee.

"This has now become a crisis," said Speaker Leonard (R-Dewitt).

Speaker Leonard is the architect of the House Bill 5013, which he says would give you more choices when you buy auto insurance.

The plan would allow you to select one of three coverage plans: $250,000 in personal injury protection; $500,000; or unlimited.

Leonard agrees giving drivers more than one option is critical to reducing costs.

"Some of them may see a 50% savings on their insurance premiums next year in the event that this passes," he said.

Speaker Leonard says the bill would require insurance companies to roll back their rates. But the Michigan Hospitals Association says that's not the whole story.

"In fact, drivers who want to keep their current coverage, there's no rate relief whatsoever," said Laura Appel, with the Michigan Hospital Association.

The MHA opposes the bill.

The bill would require medical expenses for auto insurance be set at Medicare payment levels, which means hospitals would lose a lot of money.

"That will hit just the hospital community by over $900 million," she said.

At the end of the day, the MHA says the bill is a nonstarter, which is no surprise to Speaker Leonard.

"The reason why they like this system so much is is they can charge auto accident victims three, four, five, six times the amount of a commercial health insurance company actually reimburses. I'm not one who is going to fight for the hospitals, I'm going to fight for the people of this state," Leonard said.

According to the House Fiscal Agency, this bill could cost the state $5-$10 million per year, and down the road, could create increased costs for Medicaid by $150 million per year.

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