LANSING, Mich. — Michigan's mandatory fee to cover unlimited medical benefits for injured drivers is rising to $220 a year -- a record high -- and more than double what is was a decade ago.
On Wednesday, Governor Whitmer ordered an audit into the Michigan Catastrophic Claims Association (MCCA) after the board voted to impose an additional fee increase of $28 on drivers.
Michigan's mandatory fee to cover unlimited medical benefits for injured drivers is rising to $220 a year -- a record high -- and more than double what is was a decade ago.
The organization says the fee hike is due to a higher number of claims, rising medical care costs and lower-than-expected investment earnings.
This fee would be added to a driver's existing insurance premium which brings the fee to $220 per vehicle.
“From Detroit to the Upper Peninsula, drivers are feeling the pinch of paying the highest auto insurance rates in the nation and it’s time to do something about it,” Whitmer said. “Michiganders deserve to know why they are being forced to shell out hundreds of dollars in additional fees for car insurance, which is why I’m ordering an audit to provide drivers with the transparency they deserve.”
She has directed the Department of Insurance and Financial Services (DIFS) to conduct the audit because the MCCA has increased the fee motorists pay to cover catastrophic medical claims yearly over the last three years:
-- 6.3 percent in 2017, 13 percent in 2018, and 14.5 percent in 2019 -- resulting in drivers paying more than twice as much as they did in 2008.
On Wednesday, March 13, 2019, "officials from the MCCA testified before the Senate Insurance and Banking Committee that fee increases were the result of “waste and fraud” in the medical system."
Whitmer says that the increase on Wednesday comes on the heels of a volatile market that caused the association’s investments to miss their projected returns.
“Today we told the MCCA that we were concerned and strongly urged them to provide more information so the public can understand the basis for this fee increase,” Anita Fox said, who serves as director of DIFS and sent a representative to the board meeting. “To provide greater transparency, we welcome Governor Whitmer’s direction to conduct a financial examination into the association’s operations.”
According to the press release, the MCCA is a private non-profit unincorporated association that was created by the state Legislature in 1978 to provide unlimited lifetime coverage for medical expenses over $555,000 resulting from auto accidents.
The fee revenue largely covers care for people with brain, spinal cord, back and neck injuries.
Michigan is the only state to require unlimited lifetime coverage for medical expenses resulting from auto crashes.
The Legislature has been at odds over proposals to rein in costs.
