$30 million increase in Medicaid costs if proposed Michigan auto insurance changes get approval


$30 million increase in Medicaid costs if proposed Michigan auto insurance changes get approvalOne of the recent studies conducted has revealed that there will be an increase of $30 million in the Medicaid program in Michigan if the legislature gives a nod to the changes proposed to the state’s no-fault insurance law which has been in existence for nearly 39 years now. In fact, the no-fault auto insurance law in this state is considered to be so good that many other states use this model to build of the no-fault laws for their respective states.

One of the changes proposed is to allow drivers to select different levels of coverage for PIP (personal injury protection), with the lowest coverage being $50000 and the highest being $5 million. As of now, the residents of this state pay around $145 each year to enjoy lifelong benefits of unlimited injuries and rehabilitation.

The Vice President of a Lansing firm that undertook this study, Public Sector Consultants, Jane Powers said that the study has revealed that there is no specific and strong reason as to why the coverage needs to be changed from what is in existence currently. This firm undertook the study on behalf of Coalition Protecting Auto No-Fault, an organization that is strongly opposing the proposed changes to the current law. The Coalition consists of a total of 28 members, including Michigan State Medical Society, Michigan Consumer Federation, Michigan Health and Hospital Federation and Brain Injury Association of Michigan.

The executive director of another Lansing based firm, Insurance Institute of Michigan, Pete Kuhnmuench, was of the opinion that there is a need to bring about changes to the current no-fault law that is in existence because of the consistently increasing auto insurance premiums. Also a representative for the coalition that supports the recent proposals, Coalition for No Fault Reforms, Pete Kuhnmuench said that the increasing cost of medical facilities in the state of Michigan does not make it feasible to sustain a law that provides lifetime benefits for injuries and rehabilitation. The other institutions that are a part of the coalition that supports the proposed changes are the Michigan Chamber of Commerce, Michigan Insurance Coalition and Insurance Institute of Michigan. Kuhnmuench went on to say that over the last 12 years, there has been an increase of 2500 percent in the payouts being made towards catastrophic claims.

Every year, there are close to 500 drivers in Michigan who are injured due to catastrophic accidents which calls of skilled medical aid and rehabilitation programs.