Because even in the most expensive auto-insurance market in the nation, there's still room for more pain, more pain is coming from the Michigan Catastrophic Claims Association Fund. The MCCA announced a $28 fee increase effective in July, to cover unlimited benefits for injured victims of auto accidents in the state. That's a 14.6 percent increase, prompting Gov. Gretchen Whitmer to request an audit of the MCCA, which is controlled by insurance companies.
Paul Egan in the Free Press writes:
The fee has been controversial because state courts have ruled that although the MCCA was created by an act of the Legislature, it is not subject to the Michigan Freedom of Information Act. Critics complain it is not transparent in how it calculates the fee. Though the catastrophic fund contains more than $20 billion, the MCCA says it needs higher fees to cover a $3.9-billion deficit related to existing and pending claims.
...Whitmer ordered an accelerated review by the Michigan Department of Insurance and Financial Services.
The MCCA increased the fee by 13 percent in 2018 and 6.3 percent in 2017.
Man, cars are safer than ever; deaths and injuries have been trending down for years, thanks to seat belts, air bags and child safety seat. You'd think $20 billion would be enough to care for every catastrophically injured person in the U.S., much less one state.
Others have long called for more transparency in how the MCCA manages this staggering sum. Its own self-reported detail includes these figures:
In a news release Wednesday, the fund said it paid out $1.2 billion in costs related to catastrophic injuries in 2018, including $683 million for attendant care, $121 million for prescription drugs and $107 million for hospitalization.
Twenty-eight bucks in most people's worlds will still buy a few groceries, a new pair of jeans or make a prescription co-pay. Get ready for less of that.
