Lansing— Debate over no-fault auto insurance is heating up in Lansing with Republicans divided over a House bill that would eliminate lifetime medical coverage.
Michigan is the only state to offer unlimited lifetime medical care for people involved in life-altering car accidents, a benefit that proponents say drivers can no longer afford.
The bill would allow motorists to choose less expensive plans offering from $500,000 to $5 million in medical coverage, and would also enact cost-saving measures such as limiting the hours and pay for attendant care. Hospitals and doctors would be placed on a fee schedule in an attempt to bring down medical care costs.
Supporters of the bill, including Michigan Insurance Commissioner Kevin Clinton, say changes must be made because the Michigan Catastrophic Claims Association, which covers medical bills over $500,000, is headed for insolvency. Opponents contend most motorists will opt for the cheapest policy, which won’t meet their needs if they get in a serious accident.
The bill is now under discussion by the full chamber after passing out of the House Insurance Committee on Oct. 13.
Drivers pay an annual assessment to the catastrophic claims association that goes into a fund to reimburse auto insurance companies. The association sets the assessment based on estimates of how much money is needed to cover the lifetime costs of people catastrophically injured that year, as well as to pay off the system’s liabilities. The fee is $145.
Laura Appel, vice president of federal policy and advocacy for the Michigan Health and Hospital Association, disagrees and said if the fund needs more money, the fee could be increased — just as it has been in previous years when there has been a deficit.
“Some years we’re a little ahead, currently we’re a little behind — and last year we were more behind,” Appel said. “We continue to make up the deficit, and that’s part of the process.”
If Michigan’s system is changed, the question of who pays for the medical bills will be hashed out in court, Appel said. Patients will ultimately exhaust all of their resources and end up on Medicaid.
“We have a very good system,” she said. “We each take personal responsibility for the risk of driving, and we think that’s a better system than using lawsuits and Medicaid.”
Read more about why voters are wary of past changes in Detroit News
