Michigan’s Unique Lifetime Catastrophic Auto Injury Insurance Medical Benefits Could Soon Be Reformed

Apr 23, 2015

Florida Insurance Lobbyist Donovan Brown

Above:  Colodny Fass’ Donovan Brown Notes Michigan Legislative Action Today on No-Fault Reform

SB 248 and SB 249, a pair of bills relating to No-Fault insurance approved by the Michigan Senate made national headlines this week because of the state’s unique status as the only one in the nation to require unlimited medical benefits for those who sustain catastrophic injuries in vehicle crashes. 

Michigan mandates that drivers are afforded unlimited Personal Injury Protection covering medical expenses and lost wages, a policy that insurers say has contributed to the state having some of the highest auto insurance premiums in the country.  When an accident in Michigan results in serious injury, lifetime medical expenses over $530,000 are covered by the Michigan Catastrophic Claims Association (“MCCA”), which reimburses the person’s auto insurer for those costs.  To provide that, the MCCA currently assesses a fee of $186 per vehicle.

With SB 248 and SB 249 as the lone bills on the Michigan House of Representatives’ Insurance Committee agenda yesterday, April 22, 2015, and today, April 23, legislators heard more than nine hours of testimony before they voted 9 to 6 to approve an amended SB 248 and send it to the House floor.

According to local media reports, State Representative Tom Barrett (R-Potterville) offered the substitute version of the bill that was approved this morning.  He explained that this version would:

  • Tie the reimbursement rate for the catastrophically injured to 150 percent of the Medicare reimbursement rate-a departure from the Senate-passed version, which tied reimbursement rates to what commercial health insurance carriers pay.
  • Require a rate rollback of $100 per vehicle from insurance companies for two years.  Statewide, it would be a $700 million savings to consumers in the first year, according to Representative Barrett.
  • Maintain the unlimited lifetime medical benefits included in the Senate version.

For a complete analysis of SB 248 and SB 249, click here.



Should you have any questions or comments, please contact G. Donovan Brown at Colodny Fass (+1 850 545 8864 or DBrown@ColodnyFass.com).


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