What risks are involved in driving an automobile that I may be unaware of?Unfortunately, 800 people will sustain a traumatic brain injury every day as a result of an auto accident. To make things worse, 24 people will sustain a spinal cord injury. These injuries are life changing and require the proper medical equipment and services to maximize the quality of life to these people, and Michigan has the system to help deliver.
Do people really go bankrupt from medical bills? Isn’t it usually just people who don’t have insurance?According to a Harvard Medical School study, unpaid medical bills are the leading cause of bankruptcy in the United States, causing 60% of bankruptcies filed. Almost 80% of the people who filed bankruptcy due to medical bills had health insurance at the time of their injury.
How much does this type of insurance policy cost?According to the last published data from the NAIC, the average insurance policy in Michigan is $1,100 as opposed to $900 for the national average. This includes $145 for the catastrophic claims fund assessment, which was as low as $5 a decade ago.
How long has it been around?The Michigan model for no-fault automobile insurance has been serving the citizens of Michigan for over 40 years.
How is this different from my state?Depending on your state, there are two basic types of models used outside of Michigan. Some states have “no-fault” insurance in a sense, but none of them have the lifetime personal injury protection benefit. We specifically advocate for the adoption of the Michigan model because it covers what the injured person needs, not imposing strict limits on care. Florida, for example, currently offers a no-fault policy that covers $10,000 in medical benefits and while this may sound helpful, it might not even cover a person’s transportation to the hospital. Other states have “tort” systems in which people sue each other to compensate for damages and recover funds to get treatment. Tort can unfortunately leave a catastrophic accident victim undercompensated and waiting for whatever they are able to collect.
Why do you say this is the best insurance policy in the country?Michigan has the only system that provides catastrophic accident victims with all of the medical products and services they need to optimize their quality of life. Every other system, from every other state limits access to care through strict rehabilitation requirements, limitations on visits, and/or high copays and deductibles. If a person is able to purchase a less expensive policy, but it doesn’t cover even half of what he needs, where’s the value?
How does it work?Private insurers sell policies like they do in every other state, but their exposure to “loss” – or paying out benefits to the insured- is capped at $500,000. Every dollar of benefit spent beyond the threshold is reimbursed by the Michigan Catastrophic Claims Fund, which is funded by drivers for drivers. This closed loop system allows Michigan’s insurers to offer the most extensive medical benefit available in the US for a reasonable price. Over the 40 years of its existence, the MCCA fund has grown to $20 billion.
Am I covered by my health insurance?Typically health insurers limit the number of visits to therapists and rehabilitation services. They also typically include copays for “specialists,” which can be a rather broad term in medicine. Many people are curious if the Affordable Care Act will cover these benefits and the answer is simply, no. The catastrophic plan in the ACA functions more like life insurance and is available only to those under the age of 30 or with hardship exemptions
Am I covered by Medicaid?Medicaid unfortunately leaves a lot to be desired for a catastrophic accident victim. Medicaid requires “significant functional improvement” in order to continue physical therapy, while much of the physical therapy needed would provide maintenance or help to reestablish a quality of life. Medicaid also does not cover much of the durable medical equipment available under the Michigan model, nor does it cover in home nursing care, home modifications, etc.
How many jobs will this create?L. Brooks Patterson, the Executive Director for Oakland County, MI has estimated that this model has helped sustain 10,000 jobs in his county alone. Some of the areas jobs will be created will include:
- Physical, speech, occupational therapists
- Home health aides
- Rehabilitation centers
- Durable medical equipment providers
- Medical transportation
How many dollars in Medicaid costs will this save my state?According to the House Fiscal Agency, the Michigan no-fault model saves Michigan’s budget over half a billion dollars in Medicaid costs per year. States would position themselves to save billions in the long-term.
Who benefits from this system?Accident victims are significantly better served. Medical providers have a reliable payer source that will actually pay their bill. Elected officials can save their state billions of dollars in Medicaid costs and help create thousands of jobs. So really, everyone wins.
Doesn’t “no-fault” mean I have to pay when other people cause accidents?In Michigan, no-fault functions as predominantly first party insurance. This means that when there is an accident, either driver will file a claim with his/her own insurance company. Some people find this frustrating in limited circumstances, such as being rear ended in a parking lot and having to first meet your own deductible, but the catastrophic area is where the true benefits lie. Catastrophic accident victims don’t have to “get each other’s information,” so a hit and run victim is still able to get coverage. Also, in tort states, when the at-fault driver has only purchase $100,000 in coverage, that’d be all the victim would be able to collect*.
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