OAIN: New Study Adds to Ongoing Mich. Auto Insurance Debate

Online Auto Insurance News reports that a study released this week shows Michigan’s Medicaid system could be burdened by tens of millions of extra dollars if changes to the no-fault system go through.

Online PR News – 16-September-2011 – – Recent weeks have brought a flurry of competing studies and surveys from those for and against legislation that would change Michigan’s auto insurance system, and a new report commissioned by opponents of the proposed changes says reforms would end up putting undue burden on the Medicaid system, according to Online Auto Insurance News.

Michigan’s system is the only one nationwide to require car insurance companies to pay for up to a lifetime of medical and rehabilitative care for policyholders who suffer catastrophic injuries in vehicle crashes, and many in the industry say that fact has played a major part in pushing premium rates in the state sky high.

Supporters say that legislation currently in the state Senate would lower premiums statewide by allowing motorists to buy as little as $50,000 in personal injury protection (PIP) coverage.

Critics, however, contend that the system does what it was intended to do—fund needed care for insured parties who are seriously injured in vehicle accidents. They say legislative changes would benefit coverage providers by freeing them of the obligation to pay for necessary treatment for accident victims who paid into the system.

And the study released earlier this week concluded that proposed changes to state law would remove the obligation to pay for catastrophic injury care from insurers and place it on taxpayers.

The study, which was paid for by the Michigan Brain Injury Provider Council, concluded that the shift could cost the state’s Medicaid program $30 million or more in the first year alone.

All policyholders statewide must pay into a catastrophic claims fund that foots the bill for PIP claims greater than a half-million dollars. That payment is made via a fee that is added to all vehicle policies and that currently adds up to $145 per vehicle.

The Michigan Catastrophic Claims Association paid out $897 million in 2010 to cover care for crash victims who suffered traumatic brain injuries, paraplegia, burns and other harm. Officials estimate that nearly 850 policyholders statewide will be catastrophically injured this year.

Source: http://michigancatastrophic.com/

To learn more about this and other insurance and safety issues, readers can go to www.onlineautoinsurance.com/companies/ target="_blank" class="highlight_link">http://www.onlineautoinsurance.com/companies/ where they will find informative resource pages and a rate-comparison generator that can help quickly evaluate their coverage options.

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