Opinion | Michigan no-fault insurance helps doctors, lawyers, not drivers

Dyck Van Koevering is general counsel for the Insurance Alliance of Michigan

A recently published column about Michigan’s auto no-fault system failed to address the real problems with Michigan’s broken, outdated auto no-fault law. Instead, the column is a blatant attempt to use misinformation to shift blame for Michigan’s high auto insurance premiums.

Counterpoint: Opinion: The truth about no-fault and Mayor Duggan’s misguided lawsuit

It’s not surprising to see a medical provider try to pull the wool over the eyes of Michiganders. After all, Michigan’s auto no-fault system and its mandate that all drivers purchase unlimited lifetime medical benefits has been a golden goose for them and hospitals and trial lawyers.

No other state in the country burdens its residents with such an expensive requirement. This costly mandate is one of the biggest reasons Michigan drivers pay more for car insurance than drivers in any other state.

According to numerous reports, Michigan drivers pay more than double what drivers in neighboring Indiana, Ohio and Wisconsin pay for auto insurance. And Michigan drivers pay nearly twice the national average.

Why are medical providers stooping to mistruths to protect the status quo? Because they can charge drivers injured in a car accident three and four times more for the same procedure than other forms of insurance, making no-fault a cash cow.

According to a Citizens Research Council of Michigan (CRC) report on the medical costs associated with auto no-fault: “Providers are not prevented from, and may benefit in, ordering and charging for more services that provide little, no or even negative health value to the patient.”

Reining in overcharging by hospitals and medical providers is one of three reforms that will bring down the cost of auto insurance for drivers across Michigan, from Detroit to the western Upper Peninsula. The other reforms include:

  • Cracking down on rampant fraud and abuse, which costs families hundreds of dollars a year in additional premiums
  • Giving consumers a choice in their level of medical coverage, just like other forms of insurance, which could save drivers $1 billion a year in auto insurance premiums

There’s a reason why hospitals, medical providers and trial lawyers fought against these reforms in House Bill 5013 last year. The legislation would have upended the status quo, reformed Michigan’s broken, outdated auto no-fault system and taken away their golden goose.

It also would have saved you money on your car insurance premiums.

Don’t let these special interests fool you. The only way to bring down the cost of auto insurance is through real reforms to Michigan’s outdated auto no-fault system, not smoke and mirrors.

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Mike Grant
Thu, 10/11/2018 - 9:00am

I know attacking lawyers is always popular but how exactly does, as the article's title argues, Michigan's no-fault law "help lawyers"? Michigan's no-fault law almost entirely eliminates the ability for someone to sue someone else when there is a car accident. How does a law that largely eliminates an entire class of lawsuits then "help lawyers"?

Fri, 10/12/2018 - 11:57am

Under the old tort system you could sue for damages done to you. Along comes no fault and we are told that the rates are really gonna drop because all of those frivolous lawsuits are gonna go away. What has happened over the years is that the insurance companies have denied PIP claims to the point of ridiculousness. The trial lawyers are now fighting the insurance companies on behalf of the policy holders. Wayne County has more first person cases filed than any other type now.

Thu, 10/11/2018 - 9:10am

While the unlimited care provision is certainly part of the higher cost, the issue really seems to be the nature of what hospitals and doctors can charge for that care. Setting a price structure similar to that of Medicare would go a long way towards reducing the overall cost of caring for those who actually do need life-long treatment. Without the unlimited provision, those who need lifetime care will end up on Medicaid, where everyone else in the state will pay for it.

Michael Smith
Mon, 01/07/2019 - 8:04pm

They are paying for it now with higher premiums. I see no difference.

Martha Levandowski
Thu, 10/11/2018 - 10:35am

First, If Dyck had read the entire article he’s responding to, he’d know that it called for the implementation of a fee schedule for all medical providers treating auto accident victims, effectively counteracting his main argument. A fee schedule would lower health care prices for accident victims. You can learn more about this and other reforms that would protect benefits while lowering premiums at fairandaffordable.com.

Second, it's shameful that the insurance industry continues to attack accident victims and the medical providers who care for them. They'll blame anyone but themselves for their sky-high rates. They need to be held accountable.

Thu, 10/11/2018 - 10:37am

Absolutely shameful that the insurance industry continues to attack accident victims and the medical providers who care for them. They'll blame anyone - anyone but themselves for their sky-high rates. They need to be held accountable!

William G Keyes
Thu, 10/11/2018 - 10:37am

Fact, I pay more for no fault medical coverage, than I do to insure my automobile with full coverage. As a senior citizen, w/ Medicare coverage, I feel I should at the very least be given the CHOICE to decide what coverage and at what COST I should purchase, if any at all.

Please give us some relief from Michigan no fault insurance program, that seniors don't want and further more can't afford.

William G Keyes

Joe Justusson
Thu, 10/11/2018 - 11:07am

Medicare doesn't pay for auto accident related medical claims

Michael Smith
Mon, 01/07/2019 - 8:10pm

Part A hospital
Part B medical pays 80%
I was in a motorcycle accident spent a week in hospital and they paid 80% and supplementals picked up the rest after I paid like a $180 deductable. Don't know where you get your information from but you are wrong!

Chaim Yenkel
Thu, 10/11/2018 - 7:35pm

You pay $180 annually for unlimited medical care resulting from a motor vehicle accident. You pay far more for liability and the other coverage on your policy. This is the least expensive and most comprehensive insurance you can buy. It’s a shame that insurance shills continue to mislead the public so that this poor soul remains clueless.

Otis Pishaw
Thu, 10/11/2018 - 10:45am

It doesn't help drivers unless they are in a severe accident, then it is very helpful.

Thu, 10/11/2018 - 11:08am

I find it interesting that the phrase "smoke and mirrors is used." The insurers expect us to believe them at face value even though it has been proven they use numerous non-driving rating factors and severely lack transparency when it comes to rate setting. However, when a medical or rehabilitation provider uses facts to craft their statement, suddenly it constitutes smoke and mirrors. These are the same medical and rehabilitation providers that often provide charity care to the disadvantaged and downtrodden. I can't seem to ever recall hearing a time about auto insurers providing low or no cost policies to those who can't afford it. It seems pretty easy to figure out what side of this issue is truly representing the best interest of Michiganders.

Thu, 10/11/2018 - 3:09pm

I'd be curious to know what percentage of payouts from accident fund go to injured motorcyclists vs. what they pay relative to auto drivers. I've known way too many who suffered grievous, expensive long tern injuries. Go to any long term rehab center, it's amazing how many patients were on motorcycles! Does this need looking into?

Fri, 10/12/2018 - 10:39am

Far fewer than you think, most likely. Motorcycles are excluded from the no-fault law, but still have to pay the same MCCA fee. The only way it pays out for a motorcyclist is if they are in a collision with an insured vehicle that's covered under no-fault. (https://www.michigan.gov/documents/cis/ip227_172811_7.pdf)

Thu, 10/11/2018 - 3:26pm

If we had universal healthcare, auto insurance would not have to cover medical costs at all, thus giving a major reduction in insurance costs. Universal healthcare would also eliminate the burdensome costs to business of providing health insurance and workman's comp medical coverage to their employees, thus improving their competitiveness with foreign companies.

Thu, 10/11/2018 - 5:02pm

But of course either taxes or the deficit would go through the roof wiping out that benefit without other changes no one would want to mention.

Sun, 10/14/2018 - 2:01pm

How much do you pay for insurance? Mine, including my portion and my employer's portion (yes, I am extremely fortunate) is equivalent to about half my total income. That money could easily go to cover Universal Healthcare. Medicare is one of the most successful and well run entities in either the public or private sector (as long as the politicians do not succeed in deliberately destroying it).
So we would be trading income money from for profit entities to a non profit or governmental entity. Universal Healthcare does not add to your outgo, it trades it and most likely far more efficiently.
And do not give me that tired, disproved Ronald Reagan line that "government is the problem". Most government programs are run efficiently and well which you can check at any time you care to spend a few minutes finding out the truth.

Sun, 10/21/2018 - 10:54am

Yes. A large part of the auto insurance mess is that auto insurers don't have any agreements with hospitals and doctors and pay 'at charges' which are wildly inflated, non negotiated charges that hospitals set. That's why hospitals love auto accidents - they get paid at the highest rate possible. Notice all those helicopters hospitals have? For 'swoop and scoop' - getting to accidents first to pick up the victims and then direct them to their hospitals and not competitors. Long hospitals stays, lots of expensive treatments, etc.
A state could and should set rates (use Medicare ones) for auto accidents. But that won't happen because the insurers and hospitals will lobby against that and they will buy legislators to vote against that.

Paul Jordan
Thu, 10/11/2018 - 9:31pm


Bob Short
Thu, 10/11/2018 - 9:22pm

I'm at the age (84) where every year our car insurance goes up even though I had no accidents, or any claims and our insurance just went up $11. It is now over $900 for
six months! Our car is in good shape even though it's a 2003. I hate to think
what we would have to pay for insurance on a newer car!

Paul Jordan
Thu, 10/11/2018 - 9:29pm

Remember when, back in the 60's, Michigan pioneered a state run no-frills (and very inexpensive) auto insurance? Naturally, the insurance industry destroyed it as soon as nobody was paying attention.

The insurance industry will always act to maximize its own profit, not the benefit of its customers. We shouldn't take on faith anything it says. It SAYS that companies can't afford to pay out under no-fault, but they won't reveal the figures to back that up. It's a "trade secret". That should tell us all we need to know--don't trust them.

Sherry Uelsmann
Tue, 10/23/2018 - 4:30pm

Can the people of Michigan sue the state over the high cost of car insurance. We all need to get together and sue them. I also think charging women more than men is discrimination and should be stopped immediately. I will never again drive a new car in Michigan that I have to have full coverage on again. I will only drive a car with PLPD insurance or maybe I'll just do like everyone else and have no insurance. In Michigan thats what most people do, just drive with no insurance.

Michael Smith
Mon, 01/07/2019 - 8:00pm

How many people use the no fault unlimited benefit to just plain defraud the insurance companies? Perfect scam is to claim a bad back, file for SS disability benefits to act in coordination with whatever they can suck out the insurance companies. Meanwhile the rest of us pay for these sponges. No wonder Wayne County has the highest rate in Michigan. They also lead the crime rate in Michigan in general. This is no coincidence!!