(WWJ) Amidst all the news about auto insurance reform comes this: Michigan drivers are taking a hit to their pocketbooks.
The vehicle fee to cover the cost of medical care of people catastrophically injured in a car accident will increase by $28 per vehicle to $220 annually.
The Michigan Catastrophic Claims Association takes that fee and reimburses auto insurance companies when care exceeds the $580,000 threshold.
This fee was a major point of discussion in the packages passed to potentially lower the cost of auto insurance. See details of that plan here.
Drivers may be able to waive that fee eventually as part of the reform that gives consumers the option to choose their level of insurance coverage, but no one will be exempt anytime in the near future.
The new no-fault auto insurance law doesn't go into effect until a full year from today.
At that point, the change in law should save suburban drivers into the hundreds of dollars a year and save Detroiters an estimated $1,100 a year.
But it gets worse before it gets better.
The legislation guarantees rate reductions and offers choice among personal injury protection, or PIP, levels. PIP, on average, makes up half of car premiums. The measure also prohibits the use of several non-driving factors in setting rates and scale back reimbursements for health providers that treat accident victims to 190% to 230% of what Medicare pays. Unlike several other no-fault insurance states, Michigan does not have a fee schedule for care covered by auto insurers. They pay much more for the same services than is paid by employer plans or government insurance such as Medicare or Medicaid.
