Last week, the Detroit Free Press’s featured an article highlighting that the Michigan Catastrophic Claims Association (MCCA) will assess a $145 per vehicle fee this year to cover the cost of treating catastrophically injured motorists. The MCCA was set-up when Michigan enacted the No-Fault Law in the 1970s. The association, which is made up of the largest insurance companies in the state (think State Farm, Allstate, Farm Bureau), receives this money from policyholders to help cover medical treatment for auto-accident victims who sustained paralysis, closed-head injuries or other horrific injuries that cost more than $500,000.
The article, which looks like it could have been written by an insurance company executive, featured the huge costs involved in paying catastrophic injury claims. It also highlighted the short-lived surplus that existed in late 1990s, I guess to show readers that the MCCA steals tax payer money to giveaway to accident victims. Even the title of the article – “Michigan motorists to pay the most ever to cover the cost of accident victims” – demonstrates the article’s bent. Again, the article’s author seems to say, Michigan motorists are being fleeced by those pesky accident victims, you know the guys who with permanent memory loss, severed legs, permanent cognitive disability, quadriplegia or any combination of the above.
What the article doesn’t say is that without the MCCA, these societal costs don’t go away. Horrible auto accidents where people sustain terrible long-term injuries will still happen. But instead of turning to an association made up of huge private insurance companies with adequate reserves to pay out such claims, many accident victims and their devastated families will have to turn to Medicare and Medicaid for help. Good luck with that because the implications are obvious. You, Joe Taxpayer, will still pay. However, instead of big insurance companies paying the freight, they get off scot free.
Even more devastating, whatever Medicaid or Medicare elects not to pay will simply fall on the accident victim and families. The burden shifts from the insurance company to the car accident victim. The state won’t pay for a new wheelchair? Too bad. You need a new ventilator to help you breath? Sorry. Instead of having proper medical care to treat these extremely frustrating and debilitating injures, many car accident victims will simply be left with nobody and nothing to turn to.
What the article also doesn’t say is how the MCCA arrives at the per vehicle fee. If you have an answer you must be a genius because the association is extremely secretive and releases almost no information about its reserves and profits. Even more frustrating, with the Republican romp in the 2010 elections, the Michigan Department of Insurance and the Insurance Commissioner is in the hands of “Big Insurance”, and we are likely never to get transparency on these issues. Does the $145 fee simply match the payment of claims, or is the association secretly hiding another huge surplus – while at the same time crying foul and creating great headlines for Big Insurance in the Detroit Free Press – all in the interest of overhauling Michigan’s no-fault system to help State Farm and Allstate, not motorists?
I think I know the answer, but will motorists catch on before it’s too late?