LANSING, Mich. (AP) -- The state with the highest car insurance premiums in the country is on the verge of a political showdown over long-running efforts to cut rates by reining in generous medical benefits.
Auto-friendly Michigan, which is among a dozen "no-fault" states where drivers must buy personal injury protection, is the only one to require unlimited coverage for crash victims. Motorists who are seriously injured need not worry about health expenses, but the insurance is expensive.
Now, a Republican-led Legislature that is pushing to save people money by making the coverage optional has, for the first time, passed bills out of both chambers . Lawmakers must still resolve differences between the measures, including mandating rate cuts for personal injury protection, known as PIP. But if they do, GOP legislators could send an auto insurance overhaul to the desk of Democratic Gov. Gretchen Whitmer and dare her to veto it. She is warning that she will not sign the legislation unless lawmakers also make other changes.
Democrats want to ban the use of non-driving factors like ZIP codes or credits score to set premiums, a practice that they contend is discriminatory and particularly harmful to low-income people. They also say a proposed five-year rollback in PIP rates is inadequate, and that more must be done to lock in savings for people who drop or curtail their gold-plated medical benefits.
"I've been very clear that I'm not going to sign a bill that preserves a corrupt system where insurance companies are allowed to unfairly discriminate in setting rates," Whitmer said. "I am only interested in signing a bill that is reasonable and fair and actually provides strong consumer protection and immediate financial relief."
The standoff comes as legislators report increased angst from residents over high rates.
A University of Michigan study released last month found that car insurance is unaffordable in 97% of Michigan's ZIP codes. The average premium in Michigan --- $2,693, according to the most recent report from The Zebra, an insurance comparison website --- is 83% higher than the national average of $1,470. Detroit's premium on average is $5,464, far surpassing any other U.S. city.
Some people who cannot afford the payments "drive dirty" by taking to the streets without any insurance, which is illegal.
"We are in a death spiral right now in our auto insurance industry. Higher rates have led to less people having insurance, and less people having insurance has led to higher rates. It's time for this death spiral to end," said Republican Sen. Aric Nesbitt of Lawton, who is sponsoring the Senate measure, which would also crack down on fraud and empower auto insurers to review if treatment or service is unnecessarily wasteful.
Both the Senate and House measures would let motorists with other health insurance choose not to have PIP benefits, which can account for up to half of someone's premium.
Unlike several other no-fault states, Michigan does not have a fee schedule for medical care covered by auto insurers. So car insurers pay much more for the same services than is paid by employer plans or government insurance such as Medicare or Medicaid. The legislation would cap reimbursements at workers' compensation levels.
Democrats say the bills fall short, and they appear more interested in first tightening oversight of an industry they say is less regulated than in other states before scaling back health coverage. They did propose an alternative plan in the House that would allow some drivers --- those age 62 and older --- to partially waive PIP benefits.
"This bill does not guarantee long-term rate reductions. It reverts right back to the insurance companies having complete control," said House Minority Leader Christine Greig, a Farmington Hills Democrat.
Attempts to change the auto insurance system are nothing new in Michigan and have long led to stalemates as some of the state's biggest political spenders and lobbyists --- hospitals, business groups, plaintiffs' attorneys, health providers and insurance companies --- line up for and against. Voters in 1992 and 1994 defeated insurance industry-backed ballot proposals to cap medical benefits.
But that was decades ago.
Detroit Mayor Mike Duggan and others filed a lawsuit last year asking that the 1973 no-fault law be declared unconstitutional for failing to provide "fair and equitable" insurance rates. Detroit businessman Dan Gilbert has talked about backing a 2020 ballot initiative if lawmakers do not act.
"What use is the best medical benefit in the country if our people can't afford it?" said Rep. Ben Frederick, an Owosso Republican.