Starting this summer, Michigan motorists will be paying more than ever before in per-vehicle statutory assessment fees to help insurance companies cover the cost of devastating motor vehicle injuries. The fee is set by the Michigan Catastrophic Claims Association (MCCA), which spreads the risk of financial loss where injured victims require more than $500,000 in medical care as a result of auto accidents. However, the MCCA sets its fee without any transparency or accountability.
Under Michigan’s No Fault law, a person injured in a car crash is entitled to lifetime medical benefits for care and rehabilitation related to the accident. This system allows for reasonable certainty in getting medical bills paid and gives injured people a chance to get their lives back. Yet insurance companies, which continue to post considerable profits, would have you believe the system and “soaring” costs are running them into the ground. In reality, the number of MCCA claims is expected to decrease this year, so why the jump in the statutory fee? One possibility is that insurance companies and the MCCA are trying to undermine support for Michigan’s No Fault system. Without disclosure of the MCCA’s accounting methods, we may never know the basis for the needlessly high assessments.
It is important to remember that the No Fault, personal injury protection (PIP) system as it currently exists is relatively pro-consumer. Any change that caps PIP benefits would simply shift the cost of care to the victims and to government-sponsored programs such as Medicaid and Medicare while protecting private insurance companies.
The Michigan Catastrophic Claims Association should open its books and explain its record-setting fee. Once the truth comes out, its motives will become clear.