Car insurance fee for medical coverage to drop
LANSING (AP) — Michigan drivers who want unlimited personal injury protection benefits will pay $86 per vehicle starting next summer, down from $100 currently.
The fee was mandatory for decades but became optional beginning in July under a change in state law. The Michigan Catastrophic Claims Association, a state-created nonprofit entity that reimburses auto insurers for medical claims surpassing $580,000, announced the 14% fee reduction Wednesday.
It said the cut to the fee, which was $220 per vehicle between mid-2019 and mid-2020 before falling to $100, is primarily due to health care cost controls and other changes in the 2019 law enacted by Democratic Gov. Gretchen Whitmer and the Republican-led Legislature. The changes reduced the association’s liabilities by $3.5 billion and eliminated a deficit position.
Motorists who forego personal protection benefits entirely and those who choose less coverage do not have to pay the assessment.
The insurance industry said the reduced fee underscores the need to keep the law, which — beginning next July — will also set a fee schedule for care covered by auto insurers. They currently pay much more for the same services than is paid by employer plans or government insurance such as Medicare or Medicaid.
“Especially in these uncertain times, it’s more important than ever that Michigan drivers keep as much of their hard-earned income as possible,” said House Speaker-elect Jason Wentworth, a Farwell Republican. Whitmer also welcomed the announcement, saying “these reforms are continuing to result in greater savings than required in the law.”
The $86 fee will be the lowest in 19 years.
Drivers can pick $500,000 of coverage or $250,000. Those on Medicaid can choose $50,000, while people on Medicare can opt out completely as long as everyone else in their household has another auto policy or health insurance that covers auto accident injuries.