As the lame duck Michigan Congress finishes it's year, they are attempting to push through some items.  One of the items is the Michigan no-fault insurance reform.  This law was put into place to protect innocent victims from going bankrupt from medical bills.  I have had customers of mine get in accidents and run up medical bills over $1,000,000.  One of them was driving down I-94 when someone came down an on-ramp, hit the side of her car and sent her rolling multiple times down the highway.  This is exactly what the law is intended for.  With medical bills exceeding $1,000,000, she would have gone bankrupt without this coverage.  No one should have to file bankruptcy from someone else's actions.

Once the law was put into place, it started to get abused.  This abuse is being done by medical facilities, lawyers and "injured victims".  If you get injured today at your house and go into the hospital for an x-ray, the hospital will charge your insurance the amount listed on the schedule that they have for your insurance carrier.  These prices will vary, however they are listed/scheduled and the medical facility knows what they can receive for their services.  If you get injured in an auto accident and need an x-ray, the hospital will charge your auto insurance the amount that they want to charge.  There is no set prices or "schedule" for these services.  This is obviously a huge problem as these simple services are suddenly costing your auto insurance exponentially more than it costs, Blue Cross, Aetna or whomever your medical insurance will pay.  This is the easiest item to fix in this mess.  Putting together a schedule will cap the charges on future charges.  Even if the cap is twice what the average medical insurance company would pay, it is a cap and double is likely less than what it getting paid out.  I believe that it shouldn't be any higher than the highest amount that any of the medical insurances pay, but a cap is better than not cap at all.

False claims are huge issue that needs fixing and is difficult to determine.  Early in my career I had a new prospect come into my office and he started asking me questions regarding the medical coverage.  After five minutes I realized that this guy knew more about the law than I did as a licensed agent.  The "what if" questions and specifics on the law were not anything that a consumer needs to know about when getting auto insurance.  I knew in those first few minutes that he was looking for loop holes to exploit, so I excused myself and called the underwriting department for the company that I was working for.  Even though we all knew what he was up to, I could have gotten into trouble if I refused to sell him insurance.  Over the next two years this individual filed three large medical claims on his insurance policy.  He hurt his back loading his car, slipped getting into his car injuring his knee and one other claim.  Even with the heads up from me, the company and I knew that he was working the system, but they were unable to prove it. 

No other state in the union has unlimited medical benefits like our coverage has.  Putting a cap on the benefits will limit the cost to the insurance company which should lower the cost to the consumer.  This would help lower the costs we all pay, but it doesn't solve the problem and it leaves innocent people vulnerable to massive bills.  A cap will kick the can down the road for someone else to deal with.  The cap is a short term solution to auto insurance costs without fixing anything else.   

It sounds like any possible bill this week would include a cap in addition to a fee schedule.  One item that I have not heard this week is transparency.  We all deserve to see the flow of money of the Michigan Catastrophic Claims Association.  Rep. Pete Lucido has asked for transparency with this.  No matter what ends up in the bill, it requires Governor Snyder's signature.  In the end the consumer needs to shop around and find the company that is the best fit for them.

Share |


No Comments


Post a Comment
Name
Required
E-Mail
Required (Not Displayed)
Comment
Required


All comments are moderated and stripped of HTML.
Submission Validation
Required
CAPTCHA
Change the CAPTCHA codeSpeak the CAPTCHA code
 
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2019
  • 2018


View Mobile Version
Carrier
Carrier
Carrier
Carrier
Carrier
Carrier
Carrier