To get the best value for personal injury protection policies, common-sense medical fee schedule needs to remain intact
LANSING – New data continues to show the success of the 2019 bipartisan auto no-fault reforms as more Michigan drivers are choosing personal injury protection (PIP) coverages other than unlimited, and in order for consumers to get the best value for the level of PIP they select, Michigan needs to keep a common-sense medical fee schedule intact, the Insurance Alliance of Michigan said Wednesday.
According to IAM member company data from April 2023, over 23% of drivers ─ nearly 2 million people ─ chose a level of medical coverage less than unlimited. Over the prior year, that number has increased by more than 250,000 drivers ─ or three percent ─ in the state. Insurers representing nearly 90% of the auto insurance market in Michigan responded to this survey.
The number of Michigan drivers choosing $250,000 in PIP coverage or completely opting out has grown over that period of time. The other levels of coverage have remained fairly consistent since the last survey.
In addition, weekly reporting from by the Michigan Department of Insurance and Financial Services (DIFS) shows a consistently low number of open complaints pertaining to access to care. According to DIFS, from July 1, 2021, to June 9, 2023, 127 of the 129 formal complaints received have been closed, meaning medically appropriate care is in place.
The new data once again highlights why it’s critical for the common-sense medical fee schedule and other key components of the reforms to stay intact.
“Michigan drivers continue to choose the coverage that best suits them and their budgets and are receiving access to the care they need,” said IAM Executive Director Erin McDonough.(video embedded) “The reforms also provide a common-sense medical fee schedule, rein in rampant overcharging and crack down on fraud. To ensure motorists who select coverage other than unlimited truly get their money’s worth, these reforms need to be preserved.”
Prior to the 2019 auto no-fault reforms, all Michigan drivers were forced to purchase unlimited, lifetime medical benefits with their auto insurance, regardless of whether these benefits fit their budget or their family’s needs.
Michigan is currently the only state that still offers an unlimited PIP benefit. The next highest mandatory minimum is in New York at $50,000 in PIP benefits.
Now with reforms, drivers can choose from several different levels of medical coverage, and it’s important to keep the medical fee schedule so consumers draw the most value from their PIP policies. Even motorists who choose to keep unlimited, lifetime medical benefits are saving money on their auto insurance premiums, according to the Michigan Department of Insurance and Financial Services. IAM data shows in April 2023, 64.5% of motorists choose unlimited PIP coverage, down from 67.5% in April 2022.
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IAM is a government affairs and public information association that represents auto, home, and business insurance companies and related organizations operating in Michigan. Learn more about IAM and its members on Facebook, Twitter or at www.insurancealliancemichigan.org.
