Virgil Smith’s No Fault reform bill is irresponsible and unrealistic

 

Smith and Hune introduce Senate Bill 251, replacing No Fault’s most important protections with $50,000 cap

If the insurance industry wanted to sell Sen. Virgil Smith (D-4th District) the Brooklyn Bridge, would he buy it?

Virgil Smith, with Republican co-sponsor Joe Hune, recently introduced a bill (SB 251) that would cap medical coverage for auto injury claims at $50,000.  It would wipe out the crown jewel of Michigan’s No Fault system – paying for all necessary medical care for catastrophic personal injury.

It would also eliminate the Michigan Catastrophic Claims Association (MCCA), which provides life-long coverage for all automobile accident injuries costing more than $500,000.

SB 251 would shift all of these costs from the insurance industry in Michigan (which is already making some of the highest profit margins in the nation) and onto taxpayers, by forcing people onto Medicaid and Medicare.  It would slash jobs and significantly reduce the quality of medical care that auto accident victims receive.  And it would do all of  this without any guaranteed savings or reduction in insurance premiums from the insurance industry.

The Detroit Free Press said it best back in a June 7, 2011, editorial, when the newspaper called a similar  proposed Michigan No Fault reform measure “irresponsible” and “unrealistic.”

That was when Senator Virgil Smith had wanted to replace the Michigan No Fault Law’s nearly 40-year-old guarantee of necessary medical care  for seriously injured automobile accident victims with a similar $50,000 cap on benefits.

The Free Press observed:

“To be sure, a $50,000 minimum for medical care might be irresponsible and unrealistic, given today’s medical costs.”

Now, Smith is at it again. Nearly two years after his previous bill, Senate Bill 514, was introduced, Sen. Virgil Smith, has sponsored Senate Bill 251.

I have always believed and I continue to believe that this legislation or any legislation aimed at  eliminating the most important legal protections under Michigan’s No Fault Law is both “irresponsible” and “unrealistic”

Here’s why:

1. There’s no guarantee of any savings whatsoever for Michigan drivers. The insurance industry refuses to say that eliminating the most important benefits under our current No Fault law will result in any reduction in our insurance premiums.
2. Capping benefits at $50,000 will cost auto accident victims, their families, and all of us as taxpayers untold hundreds of millions of dollars or more every year.  It is shifting burdens from the insurance industry that charges a premium for this – and is making very high profits for doing so – onto the rest of us.  It is substantially reducing their liabilities without any corresponding reduction on the price of auto insurance.
3. Auto accident victims will be forced to file thousands of unnecessary lawsuits to collect the medical benefits no longer covered by No Fault, even though such lawsuits are notoriously costly and ineffective.  In fact, such lawsuits were so burdensome to the legal system and so costly, that this was the reason Michigan created our No Fault system of insurance back in 1973.

No guaranteed savings on auto insurance

 

Sen. Smith’s latest No Fault reform effort, SB 251, suffers from the same glaring flaw that plagued and likely doomed its predecessor bills, including Smith’s own “low cost automobile insurance” pilot program, which was part of his previous SB 514:

There’s no guarantee of any savings for Michigan drivers.  There is no guarantee of any reduction in our insurance premiums.

When will Virgil Smith learn that the true goal of No Fault reform is – as he insists on  claiming – to actually save Detroit drivers money on auto insurance? There must be  attention to how, where and how much drivers will save if we agree to completely dismantle what has been called the best insurance system in the country. He and Sen. Hune have given no details of how No Fault benefits will be slashed.

On the other hand, Michigan auto insurers know exactly how much they will save.  They know exactly how much  profits will skyrocket with the enactment of a $50,000 cap on critical medical benefits and medical care for injured auto accident victims.

If we are going to dismantle No Fault, where is any guarantee of price savings to consumers?

But we do know that capping medical benefits will cost auto accident victims and taxpayers hundreds of millions of dollars

 

Auto accident victims, their families, taxpayers and health insurance companies will have to pay  hundreds of millions of dollars or more every year if Sen. Virgil Smith’s bill becomes law.

That’s because they will be picking up the tab for everything the insurance industry previously paid.  That would include all of the catastrophic-injury benefits that No Fault and the MCCA are no longer paying for.  Between 2008-11, the MCCA’s annual payouts on catastrophic claims were $724 million, $811 million, $897 million and $927 million, respectively, according to MCCA press releases.

But it isn’t just catastrophic medical care.  Auto accident victims, their families, taxpayers and Medicare, which is in turn funded by all of us as taxpayers, will be forced to pick up the tab for all of the thousands of claims with benefit costs that fall between $50,000 and $500,000. And let’s face it, after a serious auto accident, the $50,000  medical care cap could be wiped out by an emergency room alone.

By replacing the No Fault guarantee of unlimited, lifetime medical benefits with a $50,000 cap on benefits and by closing down the Michigan Catastrophic Claims Association, Smith is eliminating No Fault coverage for personal injuries with benefits that cost more than $50,000 but less than $500,000. A catastrophic injury claim is one that has insurance benefits that exceed $500,000.

This is exactly what former Michigan Insurance Commissioner Thomas C. Jones said nearly 30 years ago, when the auto insurance industry first began its push to “reform” No Fault’s guarantee of unlimited, lifetime benefits out of existence:

Capping No Fault medical benefits is “destructive to the no-fault concept,” “clearly contrary to the public interest, and “actually increases the overall cost of the catastrophic loss.”

source: michiganautolaw.com

 

State Senate panel backs bill to deregulate Internet phone service

Proponents say the bill would lock the state's hands-off policy into law, but critics say it would strip the PUC of its power to require phone firms to provide basic land-line service to any consumer.


SACRAMENTO — An industry-backed bill that would preempt state agencies from regulating Internet-enabled voice and data transmissions won unanimous approval from a state Senate committee in its first legislative hearing.

Amid protests from consumer advocates, the bill's author, Sen. Alex Padilla (D-Pacoima), tried to downplay the significance of the measure, which proponents said would simply lock the state's current hands-off policy into law.

Such a reiteration of existing practices would give Silicon Valley businesses "the certainty" to continue developing innovative, Internet-powered products and programs, Padilla argued at a hearing Tuesday of the Senate Energy, Utilities and Telecommunications Committee.

The bill "maintains the environment that has taken us to where we are today and ensures it will continue tomorrow," said Robert Callahan, a lobbyist for TechAmerica, a Silicon Valley telecommunications and technology trade group.

But opponents, mainly consumer advocates for the poor, elderly and minorities, countered that Padilla's bill, SB 1161, would strip the California Public Utilities Commission of its last vestige of power to require telephone companies to provide universal, basic land-line service to any consumer.

Those same rules also mandate that subsidized connections be available for qualifying low-income residents and that special equipment be given to people with hearing disabilities.

"We see this as a withering away and the elimination of PUC regulation over telecommunication," said Richard Holober, executive director of the Consumer Federation of California. "We think that would be bad public policy."

Residential land-line phone service was almost completely deregulated in 2006, but the PUC retained limited authority over service quality and availability. The door, however, was always left open for the agency to re-regulate the industry, should that be needed in the future. The proposed law would eliminate that option.

The bill is being pushed by AT&T Inc. and Verizon Communications Inc., which own networks connecting about 11 million land lines statewide, as well as major tech companies such as Cisco Systems Inc. that make communications hardware and software.

AT&T was the fifth-largest contributor to Padilla's campaign coffers with $23,900 from 2007 through 2010, according to nonpartisan political data firm Map-

Light.org. In all, Padilla received $69,644 from telecom services and equipment interests during that period.

Padilla, the committee's chairman, bristled at charges that he was in league with telecommunications, cable TV and Internet companies to jettison California's minimal remaining oversight of basic phone service.

He promised to amend his bill as it makes its way through the Legislature to "make it abundantly clear" that it does not eliminate any existing regulation of conventional phone service through land-line connections.

Padilla's pledge clearly swayed committee members who expressed skepticism about the need for the bill, which passed on an 11-0 vote.

"I don't want to vote for diminishing any existing consumer protections," such as universal service, said Sen. Christine Kehoe (D-San Diego) toward the end of more than two hours of testimony and deliberation.

But Padilla's stab at compromise didn't win any applause from the bill's strongest critics.

Voice over Internet Protocol technology is so inexpensive and ubiquitous that it is expected to replace the current copper wire lines in the near future, they said. Copper networks already depend on VOIP to complete most calls, and the technology is at the heart of all cable phone and fiber-optic and long-distance service.

"As more people use voice over Internet, fewer people will have [consumer] protections," said Mark Toney, executive director of the Utility Reform Network, a San Francisco consumer group. People who live in isolated communities with VOIP phones won't have the legal right to get subsidized, low-cost service, he said.

State policymakers should provide more, not less, oversight of the communications industry if they don't want to repeat the mistakes that they and their federal counterparts made when they deregulated the energy and the home mortgage industries, said Samuel Kang, managing attorney for the Greenlining Institute, a civil rights organization in Berkeley.

"Why are we now trying to take authority out of the hands of the PUC and outsource that accountability to Washington, D.C.?" he said.

The PUC has so far taken no public position on the Padilla bill.

source: http://www.latimes.com/business/la-fi-phone-deregulation-20120418,0,5202760.story

Groups, bloggers ask PNoy to veto cybercrime bill

MANILA, Philippines — Various groups and Internet users have called on President Benigno Aquino III not to sign the proposed Cybercrime Prevention Act, saying that some provisions in the bill could only do more harm than good.

The uproar against the proposed measure came just a day after the upper chamber of Congress passed Senate Bill 2796 on third reading, with majority of Senators voting to pass the bill.

The lower house, on the other hand, has yet to take up its version of the bill on second reading.

Consumer group TXTPower, in a statement, said the bill looks less about preventing cybercrimes than an “orchestrated attempt to control and limit Internet use.”

“Under the bills, government would have the power to take down, sans a court order, websites at anytime and anywhere if authorities find alleged prima facie evidence of offenses,” the group said.

The group added that the bills have “serious and grave threats” to the privacy of Filipino Internet users, especially with provisions allowing government to take and preserve traffic data for a period of time.

“For example, under the Senate version, the government would have the power to retain all user-identifiable data for a period of six months, from as many individuals it could possibly tag as suspected cybercriminals,” said TXTPower.

UP College of Law’s Internet and Society Program Director Atty. JJ Disini pointed out that as written, the proposed legislation puts too much power under the Department of Justice (DOJ), which would act as the coordinating agency for the government’s anti-cybercrime efforts.

“Under the bill, the DOJ can issue an order [to take and restrict access to data] should it be found as prima facie evidence for a violation,” Disini said. “In effect, the DOJ’s power is even greater than the court’s power.”

Vague provisions

The lawyer pointed out that when the DOJ has been able to issue an order restricting access to data, the fight is already over. In addition, Disini said the bill doesn’t provide for the specific basis to which the DOJ can issue an order.

“At least, in the case of the court, the judge has to be convinced of the evidence. There are specific requirements a judge must consider before issuing a warrant,” he stressed.

With such sweeping powers, blogger Cocoy Dayao of the ProPinoy Project said the vague provisions of the law only make it prone to abuse.

“This bill is so vaguely written that it can potentially mean the ability of Government to restrict Internet access,” Dayao said in a blog post.

“We’ve seen it in Egypt. We’ve seen [it] elsewhere during repressive regimes. I’ve no doubt that Aquino probably won’t be abusing this, but who is to say a more authoritarian government rises up?” he added.

In addition, since the proposed bill also have provisions against acts that constitute libel committed through various online venues, Dayao said the bill can also be used to muzzle overeager critics of government.

Disini further pointed out that posting libelous comments online actually constitutes double liability, since an alleged offender can potentially be accused of libel under the cybercrime law and the Revised Penal Code.

“In other words, it’s worse [to commit] libel online. It’s already worse, for other reasons. But the problem is bloggers, for example, don’t have an organization. They don’t have an infrastructure to assist them in case of libel suits,” he stressed.

‘Useless’ new agencies

Among other questionable provisions of the proposed law, Disini took notice of the part, which establishes several new agencies and offices that would be tasked to coordinate anti-cybercrime efforts of the government.

Specifically, an Office of Cybercrime will be established under the DOJ to coordinate with other cybercrime-related offices in other agencies, such as the National Bureau of Investigation (NBI), Philippine National Police (PNP) and the Information and Communications Technology Office (ICTO).

A budget of P50 will be given to these newly installed agencies to implement the provisions stated under the measure.

“Do you really need a coordinating council [to combat cybercrime]? While I understand the desire to have centralized efforts, we should encourage different agencies to improve on their skills and let whatever expertise they have to be developed,” he said.

Disini stressed that “cybercrime is actually a law-enforcement issue,” pointing out that the Philippines already has capable law-enforcement agencies to handle such cases.

Focus on FOI instead

TXTPower, for its part, said that instead of trying to clamp down on purported cybercriminals, the government should instead pass the long-overdue Freedom of Information (FOI) Bill.

“Instead of opening up government to public scrutiny with the FOI, we now see the government going on the offensive with a cybercrime bill that transforms the Philippine internet into one giant place for fishing expeditions on alleged cybercriminals,” the group said.

The Philippines is part of a small minority of countries still without an FOI law, TXTPower claimed. The House of Representatives recently said that the FOI bill is not part of the lower chamber’s priority measures for the year.

“Aside from passing the FOI law, the government should also focus its sights on improving and expanding internet access, curbing corporate abuses by telecommunications companies, and removing taxes on end-users of telecommunications services,” it added.

source: interaksyon.com