LANSING – A bill that Republicans and Democrats say will significantly lower Michigan's highest-in-the-nation auto insurance premiums was overwhelmingly approved by the Legislature on Friday and sent to Gov. Gretchen Whitmer, who has pledged to sign it.

The Senate voted 34-4 to approve a 120-page bill hastily drafted to enshrine a deal struck overnight Thursday, following lengthy talks at the Capitol to end a decades-long legislative impasse on changing Michigan's no-fault law.

Earlier Friday, the House passed the measure in a 94-15 vote. The bill, which is strongly opposed by trial lawyers and some medical providers, was given immediate effect but will not begin to roll back rates until July 2020.

The bill removes a unique Michigan feature of providing unlimited lifetime medical coverage to anyone seriously injured in an auto accident.

It is designed to give motorists rate reductions on a portion of their insurance ranging from 10% to 100%, sponsors say.

The deal provides five options for drivers on the level of personal injury protection coverage they want. Under the deal, keeping the current unlimited coverage option would guarantee a 10% rate reduction in PIP coverage, which makes up about 50% of a typical insurance bill.

The other options include:

A 20% reduction in PIP rates for $500,000 in coverage

A 35% reduction for $250,000 in coverage

A 45% reduction for $50,000 in coverage

And a 100% reduction for senior citizens and drivers who have qualifying health insurance, such as Medicare or private insurance.

The rate rollbacks would last for eight years, after which there are no guarantees.

Also included in the deal are bans on insurance companies using non-driving factors such as sex, marital status, ZIP codes, credit scores, home ownership, education level and occupation as factors in setting rates. Those provisions were key to attracting Democratic votes to the bill.

Another element of the bill would set the rates medical providers can charge for services for car crash victims. Under current law, the rates charged for services when auto insurance is paying the bill are far higher than the fee schedule for Medicare or Medicaid patients or workers' compensation.

The new fee schedule, which will be phased in over two years, will allow hospitals to charge between 200% and 240% of the Medicare reimbursement rate.

Whitmer, a Democrat, and GOP leaders announced the deal Friday morning. Whitmer said the changes will bring rate relief to motorists in Detroit and throughout the state.

“Today’s vote is truly historic," she said. "We've accomplished more in the last five months than in the last five years. This vote demonstrates that when both parties work together and build bridges, we can solve problems and make life better for the people of Michigan.

Whitmer had promised to veto bills passed earlier by the House and Senate, saying they didn't do enough to guarantee rate reductions, protect consumers, and restrict the use of non-driving factors in setting rates.

"Car insurance reform was always going to end up on the governor's desk, but it was very important that it be sent with the promise of a signature," said Senate Majority Leader Mike Shirkey, R-Clarklake, who praised the bipartisan support for the measure.

"Today, we are delivering on our promise to Michigan families to provide cheaper car insurance options."

In the House, all Republicans and most Democrats voted for the bill. Voting no were: Reps. Kyra Harris Bolden, D-Southfield; Julie Brixie-D-Okemos; Jim Ellison, D-Royal Oak; Sherry Gay-Dagnogo, D-Detroit,;Rachel Hood, D-Grand Rapids; Cynthia Johnson, D-Detroit; David LaGrand, D-Grand Rapids; Donna Lasinski, D-Scio Township; Kristy Pagan, D-Canton; Ronnie Peterson, D-Ypsilanti; Yousef Rabhi, D-Ann Arbor; Isaac Robinson, D-Detroit; Lori Stone, D-Warren; Rebekah Warren, D-Ann Arbor, and Robert Wittenberg, D-Huntington Woods.

Voting no in the Senate were Democrats Jeremy Moss of Southfield, Mallory McMorrow of Royal Oak, Jeff Irwin of Ann Arbor, and Winnie Brinks of Grand Rapids.

The agreement faced many critics, including lawmakers in Whitmer's Democratic Party.

"This is a toothless dog," Rep. Isaac Robinson, D-Detroit, said during debate on the bill Friday.

"I've got people in my district getting repo'd (having their cars repossessed) not because of the car loan, but because of the car insurance."

But the Detroit caucus was split on the merits of the bill.

Rep. Leslie Love, D-Detroit, said that while the bill is not perfect, it will finally give many residents of her city an auto insurance option they can afford. And for those with more money, "people still have the option to buy the coverage that we currently have," Love said.

Among the concerns was the fact that the bill doesn't allow low-income residents to receive the benefit of a full opt-out from PIP coverage because drivers who receive Medicaid benefits must purchase at least $50,000 worth of PIP coverage. The benefit goes to wealthier people who either have good health insurance benefits or who can afford to opt out of PIP coverage.

Critics also question whether insurance companies could hike other portions of the insurance bill to offset mandated rollbacks in the PIP rates, though proponents said the bill has safeguards to address that.

Insurance companies now have a “file and use” policy with the Department of Insurance and File Services, which means that a company files rate changes with the department and begins using them, pending approval. Under the new legislation, rates would have to be approved by the department before insurers can charge customers. The bill also contains language intended to bar companies from shifting costs from one portion of the rate to another.

Some mourned the death of a system under which anyone injured in a motor vehicle accident — regardless of their income — would have medical coverage.

"I am facing the end of a system that has stood for ... all Michigan residents," said Rabhi. "I can't be silent on a day when we are ripping apart that system."

No fiscal analysis of the bill was prepared by the time lawmakers voted Friday. But based on earlier analyses of bills with similar features, it could increase Michigan Medicaid costs by tens of millions of dollars a year, as some medical costs no longer covered by insurance would be covered by the public program.

Steve Gursten, president of Michigan Auto Law,a firm representing motorists injured in accidents, said actual rate reductions under the legislation will be far below what is promised.

"The rate reductions are not going to make an appreciable difference to lower premiums for people who currently cannot afford auto insurance," Gursten said. "No stakeholder gets what they wanted, but the consumer failed to get what they needed most out of this — meaningful rate relief."

House Speaker Lee Chatfield, R-Levering, disagreed. He said the bill for the first time introduces true cost containment measures into Michigan's no-fault system, and that will result in real savings.

"There are many stakeholders and lobbyists that are going to have to take a haircut," said Chatfield, who shrugged off criticism from several interest groups.

The Michigan Brain Injury Provider Council, which represents providers who work with catastrophically injured auto accident victims, said the bill is "an attack on Michigan’s most vulnerable residents," and will result in thousands of lost jobs in the medical industry while helping insurers by reducing the claims they must pay and driving up public costs such as Medicaid.

More:Michigan House Democrats guarantee 40% cut on your car insurance bill

Insurers expressed concerns about several aspects of the deal, including the prohibition on using non-driving factors to set rates.

“Although the bill will provide more options for drivers, it also creates numerous new problems that will need to be addressed,” said Jeffrey Junkas, assistant vice president of state government relations for the American Property Casualty Insurance Association.

“As effective cost-saving reform measures, like a meaningful fee schedule, were watered down, the bill misguidedly attacked issues that will not reduce overall auto insurance costs such as banning proven insurance rating factors.”

Tricia Kinley, president of the Insurers Alliance of Michigan, congratulated legislative leaders and Whitmer for reaching an agreement, but said she has “concerns with whether this proposal can live up to the savings the Legislature and governor are promising to drivers.”

Though use of ZIP codes in setting rates is banned under the bill, insurance companies would be able to set rates based on "territories" of the state, which haven't been defined yet. The territories could be as small as a Census tract or as large as a region, leading Democrats to say that Detroiters, who pay far more for insurance than other Michiganders, will get socked again with higher rates.

"In order for us to get to its best current form, we need to remove territorial rating. That's the true root cause of redlining," said Dagnogo, adding that negotiations were rushed, in part, to get a deal done quickly so that lawmakers can applaud themselves when they head to Mackinac Island next week for the Detroit Regional Chamber's annual Mackinac Policy Conference.

"This thing stinks as bad as the manure that is lining the streets of Mackinac." she said. "This is all about a good celebration and a headline to go party on Mackinac. Citizens should tell their legislators to stay here and get the work done, take the time to read the bill and make sure they're not putting citizens in harm's way."

The auto insurance issue emerged early as a top issue for legislative Republicans.

Pressure to reach a deal ramped up in the last week when Detroit billionaire businessman Dan Gilbert formed a ballot committee to send a reform plan to voters. That move, if successful, would have taken away the governor's veto power.

Gilbert praised the action Friday, saying lawmakers "became wise to the predatory nature and strategies of those who rationalize their fleecing of the system with twisted arguments and fear tactics while using the complexity of the issue as a shield against real change."

Michigan is currently the only state in the nation with unlimited catastrophic health coverage as part of its no-fault auto insurance law. Under the Michigan Catastrophic Claims Association, which pays those medical bills that exceed $550,000, 39,426 people have received those benefits, including 18,082 who still get their unlimited medical bills paid.

In a statement released Friday morning, Detroit Mayor Mike Duggan called the bipartisan agreement "outstanding."

"It will cut rates for Michigan drivers significantly and we congratulate Gov. Whitmer and the Republican and Democratic leadership for coming up with an excellent bipartisan deal," he said.

Senate Minority Leader Jim Ananich, D-Flint, said the agreement "shows how, when we work together, we can find common ground.”

The deal went beyond auto insurance reform plans approved separately in the House and Senate.

Early on May 9, the state House approved massive changes to Michigan's auto insurance law that were introduced only late Wednesday. House Bill 4397 would have replaced Michigan's unlimited medical coverage for catastrophic injuries with a range of personal injury protection coverage options and mandated five years of reduced rates for that portion of a motorist's auto insurance bill. Three Democrats — two from Detroit — joined all Republicans to pass the measure 61-49.

The House action followed similar action on May 7 in the GOP-controlled Senate, where major auto insurance changes were introduced, rushed through committee and approved in a 24-14 vote, with two Detroit Democrats voting yes with the Republicans. Senate Bill 1 would not have mandated specific reductions in portions of the auto insurance premium. But it, too, would have given a range of coverage options and would have phased out the Michigan Catastrophic Claims Association. That piece of the package alone was expected to reduce the current catastrophic claims surcharge of $192 per vehicle to about $40.

Whitmer said she would veto either measure, leading to intense negotiations over the past two weeks between the Republican leadership and Whitmer.

To read the contents of SB-1, go to https://tinyurl.com/yytbeuum

Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on Twitter @paulegan4. Read more on Michigan politics and sign up for our elections newsletter.