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There's the Truth, and Then There's the Auto Insurance Industry's "Virtual Truth"

An insurance industry website recently posted some “facts” about Michigan’s auto insurance system and the costs charged to insurance companies by healthcare providers. Their post read:


FACT: Auto Insurers have virtually no power to negotiate lower fees for services like private health insurers can.


The blog post below from the Michigan Health and Hospital Association shines some light on just how far the insurance industry is twisting the truth in their quest to dismantle Michigan’s no-fault insurance system.


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What Do You Want: The Virtual Truth or The Actual Truth?


“Virtually.” Auto insurers like that word. You can use it when you want to tell the “virtual” truth, instead of the actual truth.

 

They claim they have “virtually” no power to negotiate lower fees for health care services like private health insurers can. If only they had the ability to negotiate rates. But wait. They do.

 

In Michigan’s private marketplace, a third-party administrator called Cofinity negotiates payments to health care providers on behalf of auto insurers. So how have auto insurers never heard of them? Well they have. Cofinity clients include some of the biggest insurance companies in the state: AAA Michigan, Allstate, Citizens, Farmers, Liberty Mutual, Nationwide, Progressive and State Farm.

 

So let’s make things very clear: auto insurers not only have the power to negotiate payments to health providers, they are ALREADY DOING it.

 

Third party administrators like Cofinity are how healthcare services are negotiated and paid for in the private market. Just ask Blue Cross, Aetna and others. And they aren’t asking for government imposed rate setting. But auto insurance companies are. 


The fact is, auto insurers will say whatever they can to get out of paying for the care patients (i.e. their clients) need. After all, they’re in business for profits, not people.

 

It’s one thing to debate the facts; it’s another thing to make them up altogether. As key policy decisions are made over the future of Michigan’s auto insurance system, lawmakers and the public deserve the actual truth – not the virtual truth.


And the truth is that HB 4612 will shift millions of dollars of insurance industry costs onto taxpayers via the state Medicaid system, cost Michigan hospitals $180 million in lost reimbursements and lead to thousands of job losses in the post-acute injury rehabilitation field – all while providing no guarantee of long-term savings for drivers.

 

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