To get the best value for personal injury protection policies, common-sense medical fee schedule needs to remain intact
LANSING – More than one-fifth of Ingham County drivers are choosing personal injury protection (PIP) coverages rather than unlimited coverage, new data from the Insurance Alliance of Michigan (IAM) shows.
According to IAM member company data from 2023, more than 21% of Ingham County drivers ─ more than 43,000 people ─ have exercised their right to choose a level of medical coverage on their auto insurance policy other than unlimited.
Before the Legislature and Governor took action in 2019, Michigan’s broken auto no-fault system caused auto insurance premiums to skyrocket to the nation’s highest, impacting the state’s 7.2 million drivers because auto insurance is required by law in order to legally have a car on the road. The old system was a cash cow for medical providers and a cash drain for Michigan drivers, with few limits on what could be charged and how much could be prescribed. A Detroit Free Press investigative series found examples of this, including a medical provider charging $500 for an MRI through Medicare versus $5,000 when billed to auto insurance.
All Michigan drivers were forced to purchase unlimited, lifetime medical benefits with their auto insurance.
“The new data demonstrates the success of the 2019 bipartisan auto no-fault reforms as more Ingham County drivers are exercising their right to choose a policy that best fits their budget,” said IAM Executive Director Erin McDonough. “Every system – from private health insurance to workers’ compensation to Medicare and Medicaid – has cost controls and controls on the quantity of care provided. Auto insurance just never had them until the reforms. For Ingham County consumers to get the best value for the level of PIP they select, Michigan legislators need to keep a common-sense medical fee schedule intact.”
Since bipartisan auto no-fault reforms, there are now six additional options for drivers, including $500,000 coverage to opting out, Michigan is currently the only state to still offer an unlimited PIP benefit. The next highest mandatory minimum is in New York at $50,000 in PIP benefits.
“The PIP benefit is there to pay for the medically necessary care required as part of an auto accident,” McDonough said. “If no cost controls are in place for the amount medical providers charge or prescribe, consumers could wind up paying inflated costs or for unnecessary procedures with their benefit. The more than 43,000 people living in Ingham County need to be aware of attempts to remove the protection that provides the value of their PIP policies and let their legislators know they expect those protections to remain.”
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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.
