Republican House Speaker Lee Chatfield, left, and Republican Senate Majority Leader Mike Shirkey speak with reporters following the Michigan Legislature's approval of auto insurance legislation on Friday, May 24, 2019, at the Capitol in Lansing, Mich. Democratic Gov. Gretchen Whitmer is expected to sign the bill. (AP Photo/David Eggert)

By DAVID EGGERT

Associated Press

LANSING, Mich. — Michigan Gov. Gretchen Whitmer will sign a bill to cut the country’s highest auto premiums following a landmark deal that was reached with legislative leaders and approved by large margins in the House and Senate.

The changes will follow a years-long impasse in the state over generous but mandatory health benefits that are included in every car insurance policy under a law that was enacted more than 46 years ago.

A look at what the legislation means:

WHAT IS PIP?

Personal injury protection, or PIP, is a portion of your premium that covers unlimited medical treatment and rehabilitation expenses if you are injured in an accident. It also covers lost wages for three years and up to $20 daily for assistance with things like cooking, cleaning and other services you can no longer carry out due to your injuries.

WHAT DOES IT COST?

It varies by motorist. The state Department of Insurance and Financial Services says PIP on average accounted for 49% of total premiums in 2015.

IS PIP STILL

REQUIRED?

No. Starting in July 2020, you will be able to forego personal protection benefits entirely if you have health insurance such as an employer plan or Medicare. Other options will include sticking with unlimited coverage or choosing either $250,000 or $500,000 worth. If you are on Medicaid, though, you will have to carry at least $50,000 in PIP.

WHAT ARE

THE SAVINGS?

Insurers will be required, for eight years, to reduce — on average — the PIP portion of your policy by 10% (unlimited benefit), 20% ($50,000), 35% ($250,000), 45% ($500,000) or entirely. For calculation purposes, the PIP includes the yearly $220 per-vehicle fee you pay to reimburse insurers for expenses related to catastrophic injuries. That fee may drop substantially if you wave the unlimited coverage option.

DO INSURERS HAVE AN ESCAPE HATCH?

Insurers will be able to ask regulators for an exemption from the mandatory rate rollbacks by proving they would put their solvency at risk or are unconstitutional.

IS THE UNLIMITED BENEFIT VIABLE?

You will still be offered unlimited PIP. But it is unclear if it will be a realistically affordable option if many motorists opt out of the system.

WHAT ABOUT NON-DRIVING FACTORS?

Insurers already cannot base premiums on sex or marital status. The measure will also prohibit the use of home ownership, educational level, occupation, ZIP code or credit scores in setting rates. Some Democrats who opposed the bill expressed concern that insurers could still discriminate against you based on where you live or your financial information.

WILL HEALTH PROVIDERS BE AFFECTED?

Yes. Unlike several other no-fault states, hospitals, doctors and rehab facilities treating crash victims have effectively been able to charge auto insurers far more than they do for patients covered by private or government health plans. Starting in July 2021, they will be paid less for care covered by PIP — roughly 200 percent of the Medicare fee schedule. Payment for family-based attendant care will be capped at 56 hours a week.

WHAT ABOUT FRAUD?

A state anti-fraud unit created under a 2018 executive order will become permanent, working with the state police. Attorney General Dana Nessel said she is confident she will have tools to investigate and prosecute auto insurance fraud.