Auto Insurance Reimbursement Checks Are Issued Too Early

By the middle of next year, Michigan families will receive a check for $ 400 for every vehicle they have insured in Michigan as of October 31, 2021. Reimbursement follows reforms to state laws on no-fault auto insurance in 2019.

While I want families to continue to benefit from the changes in our laws, I am concerned that the rush to issue this refund could have serious consequences for people living with serious injuries from catastrophic car accidents.

I was proud to vote for auto insurance reform in 2019. The changes we’ve made give Michigan drivers the freedom to choose the level of insurance coverage that’s right for them and have lowered the cost of it. insurance throughout the state by implementing common sense measures to prevent fraud, waste and abuse.

Once the most expensive state for auto insurance, our state no longer occupies that position. Michigan rates have fallen 27% since our reforms took effect, according to a national study. Over 100,000 uninsured drivers have now purchased coverage. The competition has intensified, with 37 new companies offering auto insurance in our state. And the per-vehicle fee that Michigan drivers pay to the Michigan Catastrophic Claims Association fund has dropped from $ 220 in 2019 to $ 86 per vehicle for the current 12-month period.

Unfortunately, the reforms have also had unintended consequences for the care of some people who have suffered catastrophic injuries as a result of car accidents.

The new law required a 45% flat-rate reduction in the fees charged by institutions for post-acute care. It was aimed at providers who changed obscene amounts before our reforms. They would charge insurance companies very high rates and then use that as a tool to negotiate payment. What was not taken into account were the caretakers who were already charging fair rates for their services.

So, by lowering the rates for each post-acute guardian by 45%, it resulted in costs for the vendors who were processing the system – but it also forced those who were already charging a fair price to collect much less than what they paid for. they deserved for the services they provide. The result has forced some local service providers to downsize or shut down altogether.

I am advocating for a solution that will help these caretakers stay in business and ensure that auto accident victims get the care they need. I have no doubts that the Michiganders want those who deserve quality long-term care to receive it.

Last summer, the Legislative Assembly and the Governor agreed that we would like to learn more about the challenges our suppliers face. We have allocated $ 25 million, intended to keep long-term care providers open in 2021. In commerce, caretakers would provide additional data on their business expenses. Once the money was spent, the legislature and governor would receive a report on the data collected, which was to provide a clear path forward.

This money has not been fully spent and therefore the report for our review is not yet available. This worries me because the outstanding $ 400 reimbursement checks come from the MCCA fund – the very fund that covers medical benefits for people injured in motor vehicle crashes.

Once the checks are passed, reforming long-term care will be very difficult. It is irresponsible to issue refunds before ensuring that the full effects of the 2019 reforms are known and addressed. I urge the MCCA to reconsider.

Note to readers: The above is an opinion submission from State Representative Julie Calley. Opinions expressed are those of the author and do not necessarily reflect those of The Portland Beacon or its owner.

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Justin D. O'Neill