Michigan is facing an ongoing battle over its no-fault automobile insurance regulations, specifically where it involves the unlimited coverage it provides for catastrophic injuries, and whether that should be hedged back in order to attempt to control rapidly increasing premiums.
A secondary issue within the state – and which is not receiving quite as much attention – is the rising costs of injury treatments from auto accidents. At the moment, these expenses are greater than those for the treatments of injuries that have resulted from other circumstances.
According to AAA Michigan, the current cost to an insurance company for a CT scan no-fault claim in the metro Detroit area, in the case of a neck injury that occurred from a car collision, is approximately $1,820. Comparatively, Medicare pays about $261.50 for the service, and the workers’ compensation system in the state pays approximately $419.
Auto insurance companies have complained that they are seen as having virtually unlimited resources which are legally required to pay for any necessary and reasonable treatments. For this reason, the Legislature is being asked by the insurance industry to establish a fee schedule that is closer to that used by workers’ compensation.
According to healthcare providers, the reason that insurers face higher costs than Medicare and workers’ compensation in these cases is because they have a relatively low number of no-fault claims and therefore do not qualify for a discount due to volume. They also say that they are legally obligated to undercharge Medicare and certain other groups.
Unfortunately, the higher costs that are being paid by insurance companies are leading to rising premiums.