Increasing medical costs continue to drive up the cost of auto insurance for every automobile in Michigan
(Lansing) – Today’s announcement of the increased charge of $30.00 per vehicle per year (from $145 to $175 per car) by the Michigan Catastrophic Claims Association (MCCA) confirms what insurers and others have been telling public policymakers for years – without real cost controls, the price of Michigan’s unlimited no-fault benefits will continue to rise.
“Hopefully, this is a wake-up call to the Michigan legislature to act on no-fault reform now,” said Kurt Gallinger, Chair of the Michigan Insurance Coalition. “Left unchecked, , the practice of Michigan hospitals, and others in the medical community, of charging auto accident patients much higher rates than anyone else is driving the cost of auto insurance through the roof.”
In the past 13 years, the mandated cost for providing unlimited health care benefits for drivers through the MCCA has increased from $5 per car to $175 per car.
“Michigan’s no-fault system is the last blank check in the U.S. healthcare system,” said Dr. Robert Hartwig, President of the Insurance Information Institute. “No other state in the nation provides unlimited no-fault benefits, and for good reason – with unlimited benefits come unlimited costs that fewer and fewer people are able to afford.
The Michigan Insurance Coalition supports the approach taken by Representative Lund in House Bill 4936, the “Consumer Choice Insurance Act.” Representative Lune proposed legislation would lower the cost of auto insurance by allowing consumers choices in the level of medical coverage they could purchase. There is no reason that senior citizens, who already have Medicare insurance coverage that they have spent their whole life working for, should be required to pay again for health care coverage. The legislation would also establish a medical fee schedule similar to the worker’s compensation schedule to control the outrageous costs being billed for auto accident victim’s medical care.
Facts About Michigan No-Fault Insurance:
- Michigan is the only state in the nation mandating unlimited medical benefits as part of their auto insurance coverage. The next highest state (New York) has a mandatory requirement of $50,000.
- Hospitals and the medical community routinely charge 300 to 400 percent more for auto insurance patients then they charge for work-related injuries for the exact same procedures.
- The average cost for a no-fault claim in Michigan is $36,788, more than twice as much as the next closest state, New Jersey at $17,025.
- According to the Office of Financial and Insurance Regulation (OFIR), nineteen percent (almost 1 in 5) drivers in Michigan are uninsured.
The Michigan Insurance Coalition is a Lansing-based, state property-casualty trade association. MIC’s members are insurers who annually underwrite more than $3 billion in insurance premiums in Michigan. Most of MIC’s members have their national headquarters located right here in Michigan — proudly employing thousands of Michigan residents directly and contracting with thousands of individual agents to help serve their customers.
The Michigan insurance industry employs more than 60,000 people.