The Michigan Catastrophic Claims Association’s (MCCA) just announced fee decrease (attached) underscores the importance of staying the course on auto no-fault reform and ensuring a critical piece of the reform puzzle, a medical fee schedule, takes effect on July 2, 2021.
“Special interests, who have overcharging accident victims for years and have profited the most from the status quo, are trying to upend historic reforms to the state’s auto no-fault law through legislation like HB 5858 and SB 1233 and rob consumers of the savings they deserve,” said Erin McDonough, executive director of the Insurance Alliance of Michigan. “It’s critical for the Legislature to allow these reforms, which were passed with bipartisan support, to take effect so consumers can take full advantage of the benefits of this new law now and in the future.”
Beginning next summer, the per-vehicle for drivers choosing unlimited, lifetime medical benefits will be $86 — down from $100. Drivers who choose other levels of coverage will continue to pay $0. The decrease, the second in two years, marks a 60% drop since reforms took effect 2019.
For decades, hospitals and brain injury clinics have been routinely charging three- and four-times more for medical procedures if someone was injured in a car accident. This dramatic overcharging will be reined in by a new fee schedule for medical services, which takes effect in July of 2021.
According to a blistering investigative report from the Detroit Free Press, an MRI at a medical clinic in Metro Detroit cost $500 under Medicare, but the same MRI at the same facility and with the same type of machine will cost an auto insurer $5,300.
“We’re hearing from drivers across the state who are saving hundreds and even thousands of dollars on their auto insurance premiums under the state’s new law. We urge lawmakers in both parties to let these reforms continue working and push back on special interests who want to turn the clock back on these historic reforms,” McDonough said. “Undoing these reforms would create more economic uncertainty for Michiganders at a time when they can least afford it.”
The MCCA’s per-vehicle fee covers the cost of medical care of people catastrophically injured in a car accident. The MCCA oversees the fund, which reimburses auto insurance companies for the cost of medical care when it exceeds a certain amount, which is currently $580,000.