No-fault auto insurance law could have a major impact on hospitals
Michigan lawmakers are considering making changes to the state’s no-fault auto insurance law in order to address the issues concerning expensive insurance coverage and the cost of medical care. Changes to the state’s law could have a major impact on its hospitals as well. The Michigan Health & Hospital Association has released estimates that suggest that proposed changes to the state’s auto insurance law will cost hospitals approximately $1.2 billion annually for treating those that have been in car accidents.
Hospital association takes steps to address changes to state law
The estimates from the Michigan Health & Hospital Association include costs associated with rehabilitation services and assisted living centers. The projections also involves the cost of in-home care and other medical service that can benefit those that have been injured in a car accident. In order to avoid some of the financial impact that changes to the state’s law is expected to have, the organization has cut the rates that it imposes on auto insurance providers by 20%.
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Reduced rates may be good for auto insurance companies
This is an effort to better situate itself financially, as changes to the state’s no-fault law may have a greater financial impact in the coming years. The Michigan Health & Hospital Association will also be freezing its rates for two years, preventing any rate adjustments from being made during that time. This reduction in rates and the rate freeze is expected to be a boon for the auto insurance industry, though it may mean that some hospitals will see a decline in revenue for a time being.
No-fault law may be contributing to the rise in auto insurance rates
Michigan’s no-fault auto insurance law has been criticized for raising rates for coverage for some time. No-fault laws are often cited as being one of the reasons for a higher rate of insurance fraud. Such laws also have an impact of insurance rates. Rates for coverage are typically higher in states with no-fault laws in place, but rates are typically affected by a wide range of factors.