Stop Overcharging Petition Meant to Push GOP No-Fault Reform

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The Michigan Board of Canvassers recently approved petition language for a 2016 ballot initiative by the group “Stop Overcharging.” But don’t be fooled by the group’s name. This petition is backed by the insurance industry and is designed, not to lower medical expenses, but to push legislators to pass the GOP’s No-Fault Reform bills.

The Petition

The Stop Overcharging petition  would “prohibit hospitals and health providers from charging more than 150 percent of the lowest amount they accept as payment in full from any payer.” The initiative’s coordinator, Rocky Raczkowski , a former Republican state lawmaker, claims “This is truly a citizens’ initiative to make sure that we address the discriminatory pricing practices that hospitals charge”

But the Coalition Protecting Auto No-Fault has called this petition

“A cynical ploy by insurance companies to threaten an end run around the legislature that they think will force lawmakers into passing their no-fault decimation bills in the lame duck session – bills that would severely restrict care to Michigan’s most injured people and shift millions of dollars of costs onto taxpayers.”

The Problem

Hospitals are already required by law to charge everyone the same prices. They can accept lower prices than they charge from insurance providers and state insurance (like Medicare and Medicaid) because those group policies trade volume for price – like a bulk discount.

But the Stop Overcharging petition would limit the amount charged to 150% of the amount accepted from any payer, including Medicare and Medicaid. To make ends meet, hospitals will be forced to renegotiate the amount they accept from these social safety nets, driving up the cost of these programs to the tax payers, or stop providing services to the poor all together.

In exchange, the insurance industry would benefit from the reduced charged amounts for services. They would then be able to negotiate a lower payment for the same services by claiming anything more is higher than is “reasonable and necessary” under the Michigan No-Fault Insurance Act.

The Politics

This petition is really a way of putting pressure on legislators to pass bad law. By proposing to make No-Fault reform a ballot issue, Raczkowski is threatening to take control out of the legislature’s hands. He has admitted that he is hoping the legislature will pass the GOP No-Fault reform bills in the “lame-duck” session after the November 4 election. But these bills are bad for Michigan tax payers and accident victims alike, and that’s why they haven’t become law, even though the GOP controls the Michigan legislature.

Don’t let your representative give in to the pressure to make the wrong reforms to the Michigan No-Fault Auto Insurance Act. Michigan is among the most profitable states for auto insurance companies. Let your legislators know that you support price controls on your auto insurance premiums. Call your representative today and tell him or her that the GOP No-Fault reform is no good for Michigan drivers.