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Reforming the Michigan No-Fault Act has become a recurring theme. Politicians, lobbyists, and industry professionals have all advocated undercutting motorists’ protections in favor of affordability and profits. Now the Mackinac center has entered the fray. But their short-sighted perspective simply gets no-fault reform wrong.
Recently the Mackinac Center for Public Policy posted a summary of an interview of Public Policy Director of Research Michael Van Beek by TV 6 and Fox UP. The Mackinac Center bills itself as “a nonpartisan research and educational institute dedicated to improving the quality of life for all Michigan residents by promoting sound solutions to state and local policy questions.”
But when it came to no-fault reform, the Director’s opinion was anything but nuanced. Michigan, admittedly, has high auto insurance premiums, which is often the basis for calls to reform. However, rather than looking at all the contributing factors to those premiums, Van Beek focused on the low-hanging fruit. He said:
One simple reform, I think, would be to look at the unlimited personal injury protection and get that in line with what’s more common throughout the country, which is to have a limited personal injury protection.
He went on to blame the high policies on medical providers:
“That’s because hospitals know that they can charge more because auto insurance companies are required to pay an unlimited amount for medical benefits for people who are injured in automobile accidents.”
But his perspective falls short in a number of ways, all of which favor the auto insurance industry, and not the Michigan residents the organization claims to support.
The Michigan No-Fault Act requires auto insurance providers to pay “reasonable and necessary” medical expenses related to a motor vehicle accident. Insurance adjusters and auditors may challenge any medical billing that is excessive. So hospitals know that if they did try to charge more to insurance companies, they would be in store for long and expensive litigation.
Caps on no-fault medical benefits do nothing to actually limit expenses. Instead, they put the burden of catastrophic auto injuries on the motorists. When an injured driver runs out of auto insurance, medical insurance, and savings, it will fall to the taxpayers to cover the bill through Medicaid, social security, and other social safety nets.
Rather than simply shifting the costs from the insurance companies to the taxpayers, any no-fault reform should take a serious look at where those costs are coming from. Stronger regulation of the industry itself will do more to limit motorists’ expenses than simply capping benefits.
David Christensen is an auto accident attorney at Christensen Law in Southfield, Michigan. He fights back against the auto industry to make sure motorists get the benefits they need. If you have been seriously injured in a motor vehicle accident, contact Christensen Law today for a free consultation.