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Michigan Auto Insurance Drivers to See a 21% Increase in the Mandatory MCCA Fee

Did you know that effective July 1, 2012 the Michigan Catastrophic Claims Association (MCCA) charge is being increased from $145 to $175 per car?

Increasing medical costs continue to drive up the cost of Michigan auto insurance for every automobile in Michigan

If you have not heard yet, effective July 1, 2012 your Michigan auto insurance will increase by $30.00 per vehicle per year.  The Michigan Catastrophic Claims Association (MCCA) charge is being increased from $145 to $175 per car.  This confirms what insurers and others have been telling public policymakers for years – without real cost controls the price of Michigan’s unlimited no-fault insurance benefits will continue to rise.

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.

The Michigan Catastrophic Claims Association (MCCA), a private non-profit unincorporated association, was created by the state Legislature in 1978.  Michigan’s unique auto insurance no-fault law provides unlimited lifetime coverage for medical expenses which result from auto accidents.  The MCCA reimburses no-fault  auto insurance companies for each Personal Injury Protection (PIP) medical claim paid in excess of a set amount. Currently that amount is $500,000. That means that the insurance company pays the entire claim, but is reimbursed by the MCCA for medical costs over $500,000.

All auto insurance companies operating in Michigan are assessed to cover the catastrophic medical claims occurring in Michigan.  Those assessments are passed on to auto insurance policyholders.

Facts about Michigan No-Fault Auto Insurance (provided by the Michigan Insurance Coalition):

  • 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 auto 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.

Get involved.  Please contact your state lawmakers and let them know that you support reforming Michigan’s broken no-fault insurance system. Click here to email your state Representative and Senator expressing your support for reforming Michigan’s no-fault insurance laws.

For more information, please visit www.alliedinsmgr.com

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Christopher July 05, 2012 at 02:08 PM
I know someone will write in that this is a function of greedy insurance companies, but it really isn't. Create a fee schedule for the docs like their is for workers comp and this number will drop.
Dan Tyler July 06, 2012 at 12:52 PM
I do not believe the system is broken but rather mismanaged. Results from lawsuits brought against the MCCA by the Brain Injury association of Michigan and Coalition to Protect Auto No-Fault will likely reveal this. Contact your legislature and ask them to support Rep. Phil Cavanaugh's HB 4785 and HB 4786 which would open the MCCA books and reveal the truth.
Patricia July 07, 2012 at 03:58 PM
Doctors already have tightly controlled fee schedules-unfortunately, while they are very controlled, the premiums from the insurance carriers are not. Physicians sign for the PPO's or face declining patients. The largest PPO in this State holds contracts with approximately 95% of Work Comp carriers and auto insurance companies. The amount they are paid is less than what Medicare pays. On the other hand, insurances do not have the same control. Work comp has a fee schedule but most doctors don't see that as payment. The PPO's are anywhere from 20-33% lower in the fee they actually pay the doctor. The problem is mismanagement starting from uninsured, drunk, texting, and exclusions and max's in health insurance coupled with mismanagement from Lansing and the insurance companies. A very broken system that is costing everyone a lot of money. Remember also the 80-20 rule. 80% are paying a lot extra to support the other 20%.

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