Myth #9: Duggan Fixed the Auto Insurance Rates
Before I start, know this:
"The #1 reason for Black people to be jailed in Michigan is driving with a suspended license. The #1 reason for suspended licenses is driving without insurance. The #1 reason for driving without insurance is the price of auto insurance." —Jamon Jordan, local historian
Let's stop right here and point out that a Metro Times report discovered that Mike Duggan received at least $37,000 from auto-insurance industry-connected individual donors and groups between 2013 and October 2017. They included auto insurance franchise owners, brokers, and lobbying groups mostly based outside city. So let's get that out in the open right off the tilly...
Anyway, Duggan and his supporters claimed that House Bill 5013 would have reduced rates 20% on average statewide, and allowed drivers to choose from four different rate levels, all of which were supposed to save you 10-20% on your bill. Sounds great, but a lot of people were not taking the bait.
ALL of the Democrats in the State House voted against it, except the four who were in Duggan's pocket. They claimed that the bill was riddled with flaws, most importantly a loophole for insurers where there was no legal mandate whatsoever for them to actually reduce rates. Here is a list of the other major issues:
- Insurers would not pass the full savings from the personal injury portion of premiums onto drivers.
- It failed to address redlining (charging different rates based on non-driving factors like where you live, your credit score, occupation, gender, or level of education).
- The state's nonpartisan House Fiscal Agency found that the bill would have shifted about $150 million in medical costs for injured drivers to taxpayer-funded Medicaid.
- The new coverage options were written in such a way as to lure consumers into making irresponsible choices (much like the deceptive subprime mortgages that led to the home foreclosure crisis).
- The proposed cost-containment mechanisms would have put hospitals and rehabilitation centers in a financial squeeze.
- Michigan could lose up to $35 million in annual revenue because insurance companies pay state taxes on premiums, and Duggan's plan would lower premiums.
"We are strongly—and in the strongest terms—opposed to this bill," said Steve Sinas of the Coalition Protecting Auto No Fault, a lobbying group of medical providers, patient advocates and plaintiffs' lawyers. They said consumers who chose the any of the first three of the four PIP options would find themselves in "dire" circumstances in the case of a "catastrophic" accident, and neither commercial health insurance, Medicare, nor Medicaid would pay for all the in-home care and other assistance that such individuals would need.
After it was defeated, a bitter Duggan told the Detroit News, "Half of the Detroit delegation didn't vote with us...I intend to campaign against every one of them this August."
In defense of her "nay" vote State Rep. Stephanie Chang (who represents my district of Detroit), said "I think a lot of the pieces in House Bill 5013 were written in terms to benefit the insurance industry." Among the other opponents of Duggan's plan were the Michigan Health & Hospital Association, and the Michigan Association for Justice (which represents attorneys), calling it a “giveaway” to insurers.
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| He hates this photo |
State Rep. Chang said she voted no because she believed that "the bill would do damage to her constituents," and was taken aback by Duggan's promise of political payback for her and the other Detroit reps who voted against him. Rep. LaTanya Garrett, who had actually campaigned for Duggan on his first run for mayor also voted no, called Duggan's revenge remarks "bullying at its finest."
Some of the Detroit House Democrats who voted against Duggan's bill subsequently put their support behind a package of alternative no-fault reform bills that would reduce premiums and address redlining, without doing away with the state’s unlimited medical cap. The bills did not have support from the insurance industry, and Duggan did not offer support for it. The package did not pass the Republican-led legislature. This graph below shows how their alternative "Fair and Affordable No-Fault Reform" stacked up against Duggan’s plan:
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| Click for full size (image via MetroTimes.com) |
Metro Times ran another article that mentions the auto insurance scam and goes much deeper into Duggan's vengeful nature:
Even though Jack Lessenberry opens that story by kissing Duggan's ass, he goes on to say that Duggan "also can be brutally ruthless." And this story was about a woman who found out just how petty and spiteful Duggan can be to people who don't play his way.
Pamela Sossi was an aspiring politician who was firmly in Duggan's camp, but she did not support his D-Insurance reform plan. Yes, Duggan really did go after the people who opposed his insurance plan—that wasn't just an idle threat. Overnight Duggan went from supporting Sossi's run for a seat in the State House, to backing her opponent, and claiming that Sossi "was in the pocket of the medical providers and unscrupulous attorneys who are ripping off our residents."
