CPAN Patient Resource: Auto No-Fault Lifetime/Unlimited Medical Coverage Vs. Medicare and Medicaid – Know the Facts!
Give this important resource to your Medicare and Medicaid patients. If they decide to opt out of auto no-fault, that decision could have devastating ramifications!
Download this important patient resource here.
For more than four decades, Michigan’s auto no-fault law ensured that individuals and their loved ones would have their care covered if they were seriously injured in a motor vehicle crash, no matter who was at fault. That all changed in 2019, when Michigan lawmakers amended the law. The major changes brought about by this new law have dramatically affected all consumers and their families. This is especially true for seniors and those on Medicare or Medicaid.
Under these amended laws, drivers are now required to make certain specific choices regarding their medical expense and liability insurance coverages. Make no mistake about it, these choices and their associated risks are significant, especially when driving is the most dangerous activity many people do on a regular basis.
Medicare beneficiaries have the option to opt out of PIP medical coverage altogether. Michiganders on Medicaid can purchase a PIP coverage policy capped at $50,000.
To help protect drivers and families, CPAN, Michigan’s consumer advocate for auto insurance policyholders, has prepared a flier to assist consumers in making these choices. It provides a comprehensive comparison of No-Fault Unlimited/Lifetime medical coverage versus what is covered under Medicare and Medicaid. This flyer is a valuable educational tool that will help your patients with Medicare and Medicaid as their primary health coverage make informed auto insurance coverage decisions.
More consumer information about Michigan auto insurance, including explainer videos and a FAQ section, can be found at ShopYourPolicyMI.com. There is also a special page for seniors: https://shopyourpolicymi.com/for-seniors.
New Research: After No-Fault “Reform,” Michigan Drivers Paying More for Auto Insurance, Though Many Have Seen Benefits Significantly Reduced
Citizens Insurance Policyholders Paying on Average $90 More Than Before “Reform” Enacted
While Michigan’s auto insurance lobby has alleged that drivers are seeing significant savings due to 2019’s auto insurance reform package, new research released today by CPAN shows that customers of Citizens Insurance – one of the largest auto insurance companies in the state – are paying the insurer more now than they were before the new law was passed.
CPAN is a broad bipartisan, Michigan-based coalition whose mission is to be the consumer advocate for auto insurance policyholders, those who have been injured in a motor vehicle crash, and the medical providers caring for them, representing them at the Capitol, in the courts, and in the public forum. The MAC is a founding and Executive Committee member of CPAN.
The research was conducted by Douglas Heller, a national insurance expert and consultant to CPAN. Heller is Director of Insurance at the Consumer Federation of America.
“It has been a great two years for auto insurance companies in Michigan – not so much for consumers,” Heller said. “Despite claims of savings for Michigan drivers, insurance companies like Citizens are charging them more on average than they were before the new auto insurance law was passed. Many are paying more for far less coverage than prior to the 2019 reforms. In addition, persistent discrimination against drivers in communities like Detroit mean that those who need low-cost options the most end up paying more than wealthy drivers who purchase full unlimited benefits. The big savings for drivers promised by lawmakers and the auto insurance lobby appear to be a mirage.”
By analyzing public documents filed by Citizens, Heller found that:
- On average, Citizens customers are paying the company $90 more for their combined auto insurance coverages now than before reform was passed, despite many of them having significantly fewer benefits should they get into a catastrophic crash.
- Discriminatory pricing persists: The rate charged to a Citizens customer of the 48215 ZIP code in Detroit purchasing only $50,000 in Personal Injury Protection benefits is $1,564 more than the rate charged to a resident of the 48085 ZIP code in Troy buying unlimited/lifetime PIP.
- Citizens Insurance saw a 24% increase in annual operating profit in 2020-2021 compared to 2017-2019, due in part to the 45% cut in care passed as part of auto insurance reform, as well as fewer claims during the pandemic.
- Citizens raised rates on January 1, 2022, rather than lowering them, despite huge profits and the persistent impact of the pandemic.
- Michigan policyholders were overcharged by $1.2 billion in 2020, as miles driven, vehicle crashes, and auto insurance claims dropped because of the pandemic.
For a pdf handout outlining these findings, click here. A presentation from Mr. Heller on his findings can be found here. A Detroit News article on his findings is available here.
CPAN President Devin Hutchings called on the Legislature to revisit the law in light of hard data showing its ineffectiveness.
“It’s time to tell the truth – auto insurance reform has been an unmitigated disaster,” he said. “It has stripped benefits for survivors of catastrophic accidents, put quality health care providers out of business, left patients without access to needed care, and allowed for continued redlining and other discriminatory practices while insurance companies rake in record profits. To top it off, our premiums are going up, rather than down.”
“Acceptance is the first step toward positive change,” Hutchings added. “Lawmakers need to stop playing political games and acknowledge that more work is needed to end redlining, protect vulnerable crash survivors, and lower premiums for drivers across the state.”
Heller’s research backs up findings from The Zebra’s 2022 State of Auto Insurance report, which found that Michigan still has the second highest premiums in the nation, while Detroit remains the most expensive city in the country for auto insurance. Dearborn and River Rogue also make the top 10.
As consumers continue to feel pain in the pocketbook, the 45% cut in catastrophic care passed as part of auto insurance reform has proved to be devastating – and in some cases, deadly – for survivors of serious car crashes. According to a recent report from the nonprofit health organization MPHI, as of October 20, 2021, 1,548 no-fault patients have been discharged by their previous providers and 3,049 Michigan jobs have been eliminated since the 45% cut went into effect in July 2021. Meanwhile, 140 organizations reported having to significantly reduce services, 96 organizations can’t accept new patients with no-fault insurance funding, and 21 organizations have had to cease operating completely, devastating Michigan’s system of post-acute care and overburdening a health care system already strained due to the pandemic.
New Statewide Poll: Costs Up for Plurality of Michigan Drivers
Further showing that the benefits auto no-fault “reform” proponents promised have not materialized for Michigan drivers, a new statewide poll released March 22, 2022, shows that auto insurance rates have not gone down for two-thirds of Michigan drivers, and a plurality (35.9%) have seen higher costs. The poll also found overwhelming support for fixing the new auto insurance law to ensure that catastrophic accident victims receive the care they paid for, with two-thirds of voters calling for a fix.
"Lawmakers need to wake up to the fact that over two-thirds of likely Michigan voters say their auto insurance rates have either stayed the same or gone up, and over one-third say their rates have actually gone up," said Michigan Brain Injury Provider Council (MBIPC) President Tom Judd. "Meanwhile, what did the 2019 auto reform package cost our state? We're now in the midst of an avoidable Michigan Catastrophic Care Crisis. Likely voters see through the politics of boosting the profits of auto insurers at the expense of victims of catastrophic auto accidents, and nearly 65% say they want a legislative fix to end the crisis of Michigan's most vulnerable losing care."
The results are from a poll conducted by Lansing-based Marketing Resource Group, LLC, and commissioned by MBIPC, which surveyed 604 likely Michigan voters. The survey was conducted through live interviews between March 18-21, 2022, and had a margin of error of +/- 4%.
The poll found that:
- 9% of Michigan voters are paying more for their auto insurance than they were a year ago.
- Only 6.1% of respondents said their rates were much less expensive.
- 5% said they were paying about the same.
- 7% of Michigan voters support an auto no-fault “fix,” while only 7.5% strongly oppose such a fix.
In March, Michigan Speaker of the House Jason Wentworth (R-Clare) announced that he would be refusing to take up any bill this year that would fix the auto insurance law to protect victims who have lost their care, saying it was simply “time to move on.”
"Lawmakers who think it prudent to attempt to move on from the #MICareCrisis should think again,” Judd said. “For the past year, Michigan voters in districts across the state have heard the steady drumbeat of stories about the thousands of Michigan crash victims whose lives will never be the same again, and whose care is being cruelly taken away due to some sort of twisted political calculus that simply doesn't add up. They can come together now to make a fix or see how the Michigan Care Crisis impacts their votes in November."
CPAN Press Release, “New Research Shows Drivers Are Paying Higher Premiums Today Than Before Auto Insurance Reform Was Enacted; Savings Appear to Be a Mirage, March 23, 2022
Michigan Brain Injury Provider Council Press Release, “New Statewide Poll Finds That Auto Insurance Rates Have Not Gone Down for Two-Thirds of Michigan Drivers; Plurality Have Seen Higher Costs,” March 22, 2022