After decades of debate over car insurance in Michigan, that’s how long it took for one very wealthy man to seal the fate of Michigan’s no-fault insurance policy, which granted unlimited insurance coverage to the victims of car crashes, regardless of whether they were responsible for the crash.
After Quicken Loans CEO Dan Gilbert’s announcement that he was fronting the money for a petition drive to change the law, Democratic Governor Gretchen Whitmer fell in line and supported the Republican Legislature’s bills to kill Michigan’s no-fault auto insurance law, passed in 1973.
In the Detroit News of Sunday, May 19, columnist Nolan Finley announced that a “source close to the situation” had told him Gilbert had hired National Petition Management, “the nation’s leading signature gathering outfit,” and was preparing to front the millions of dollars necessary to get a proposal on the ballot to kill no-fault.
The disclosure was an obvious power play on the Governor, who’d threatened to veto the Republican insurance proposal, citing its inadequate protections for consumers.
“I’m not going to be bullied into doing something,” Whitmer told media after Gilbert issued his petition threat.
But by Friday, she’d agreed to sign the bill.
What do concessions mean? Not much
The Governor did appear to extract some concessions, including bans on rate discrimination by gender and ZIP code. But those concessions may not count for much.
Although the law bans insurers from setting rates by ZIP code, for example, it allows them to be set by “territory,” a word which apparently means any other geographic area.
It’s simply incorrect, then, to assert, as did Democratic State Senator Adam Hollier, that the bill will end the practice of insurance “redlining.”
Hollier suggested to a reporter that the proposals would reduce the $3000 disparity between the auto insurance he pays in Detroit and what a friend of his pays across the city limit in Redford.
Hollier was elected last year with support from the “dark money” group Detroiters for Change, a which endorsed candidates who sided with Mayor Duggan’s bid to eliminate no-fault insurance.
In a creative interpretation of Michigan campaign finance law, the state determined that Detroiters for Change’s campaign ads were legal because they did not expressly call for the election of Hollier and other candidates.
Instead, they made subtle statements like “We Need Adam Hollier in Lansing.”
The bill’s impact
Given the unanimous Republican support for the bill, and the Republican support for the bill in the heavily gerrymandered Legislature, its passage was assured once the Governor announced her support.
Some Democrats who had raised concerns about the proposal cited Gilbert’s referendum threat in deciding to vote for the proposal. “If we didn’t move ahead with this bill,” State Sen. Stephanie Chang (D-Detroit) wrote in a Facebook post, “the other option would be the Gilbert-backed auto insurance citizen initiative,” which she called “not an acceptable option.”
Other Democrats still voted against the proposal on principle.
State Representative Sherry Gay-Dagnogo (D-Detroit) cited the failure to ban redlining in opposing the bill, which she said “stinks as bad as the manure that is lining the streets of Mackinac [Island],” where today, Whitmer signed the bill into law.
It was an incongruous setting, since the island is one of the few places in Michigan that doesn’t have any cars.
Other Democrats in the legislature also argued that creating a tiered system of insurance “choices” for drivers, the lowest of which provides only $50,000 in coverage, was inherently unfair in itself, since it would institutionalize a system of unequal coverage.
House Democratic Floor Leader Yousef Rabhi (D-Ann Arbor), who has been the Legislature’s most outspoken advocate of a Medicare for All universal healthcare proposal, posted on Facebook that the announcement of the deal marked “a shameful day in Michigan.”
“Rates will not go down,” he posted today, after the Governor signed the bill. “Redlining will continue. Accident victims will have crippling out of pocket costs and some will likely die due to lack of coverage.”
The non-partisan Senate Fiscal Agency had estimated that the proposal will ultimately cost Michigan taxpayers at least $70 million in additional Medicaid costs. The human costs will only become clear with time.
Democracy doesn’t work when billionaires are involved
The man whose money had ensured the death of no-fault wasn’t on Mackinac to witness the signing.
Dan Gilbert was driven to the hospital last Sunday, where he suffered a stroke. He is now said to be recovering.
With a net worth of $7.3 billion, Gilbert doesn’t need to worry much about being able to buy insurance coverage.
As the previous week’s events showed, his fortune also enables him to buy political action, regardless of the costs for ordinary Michigan residents.
If the tortuous story of the end of auto no-fault shows anything, it’s that Michigan’s political system remains profoundly compromised by the dominance of a wealthy few, even after Democrats took back the governorship and other statewide posts in last year’s elections.
Many commentators, on both sides of the aisle, would prefer that we overlook that reality, or simply accept it.
The Detroit Free Press editorial page, for example, has so far been silent on the insurance deal, although Free Press columnist Nancy Kaffer previously described the GOP bills as “lip service that doesn’t even try to fix the problem.”
In a column for Michigan Advance, which claims to offer “top-notch progressive commentary,” publicist Susan Demas heralded the no-fault deal, passed at the political equivalent of gunpoint, as a “bipartisan plan. She lauded the Governor for going along with the “opaque process,” since “those of us who have been around for more than a minute know that this is, of course, how big deals are always made.”
There’s a kernel of truth there: this is how deals get made when money rules politics. But it doesn’t have to be that way.
There are plenty of blogs and various news sources out there. But we need more that refuse to acknowledge the inevitability of oligarchy.
In future articles, Michigan Left will do its best to keep that up. We’ll say it here: Billionaires are incompatible with real freedom. Government of the people, by the people, for the people, is the only legitimate kind. And while our state is still on a crash course with corporate rule, it’s worth fighting to turn us towards political and economic democracy.
Want to call the Governor to express your disappointment? You can reach her office at 517-335-7858.