Firefighters, police, tow truck employees, and drivers help clear cars that collide in a multi-vehicle accident that occurred in the north of US 31 in Muskegon. (Photo: JIMMIE PRESLEY)

Lansing – Michigan motorists are ready to see higher car insurance bills as their suppliers' annual estimate rises $ 28 this summer.

Michigan Catastrophic Claims Association announced Wednesday The annual fee will increase 15 percent from $ 1,980 to $ 220 from 1 July.

Under the law of the state, car insurance companies have to pay the cost of life-long medical benefits, which are guaranteed under Michigan's Compensated Motor Insurance Law. As a rule, insurers pass on this fee to consumers.

The MCCA operates as a reinsurance program and reimburses car insurance companies for expensive medical claims for car drivers who have been catastrophically injured in car accidents. The claims threshold will also rise from $ 550,000 to $ 580,000 this summer.

The pending increase in the fee, which has risen 76 percent since reaching $ 124.89 in 2009, comes about as legislators in Michigan are developing plans to reform the state's debt-free car insurance and tariffs already count to the most expensive in the nation.

MCCA officials said earlier this month in front of a Senate committee and denied anti-transparency allegations while they argued "wastage and fraud" in the medical system drives up insurance costs.

The private nonprofit association, founded by the Michigan Legislature in 1978 and controlled by insurance companies, has assets of $ 20.6 billion, but claims long-term debt of $ 23.5 billion. Dollar.

MCCA Executive Director Kevin Clinton told lawmakers that the annual fee will cover catastrophic claims this year and will also gradually pay back a deficit of $ 2.9 billion over a 15-year period.

In announcing the upcoming increase in the $ 28 fee on Wednesday, the MCCA said its costs are rising in part because more people receive benefits and health care costs continue to rise.

The association said it paid $ 1.2 billion in 2018 for catastrophic injuries. Most claims involve brain and spinal cord injuries, multiple fractures, and back and neck injuries. Most payments were for accompanying care, prescriptions and hospitalization.

The MCCA is not subject to any public records that could shed more light on the fee calculation process, but it publishes internal reports on financial reports and independent auditors every year.

The Insurance Alliance of Michigan, a coalition of insurers that asks lawmakers to rethink the decision The state's mandate for unlimited lifelong medical benefits underscores that the pending MCCA fee increase underscores the need for reform.

"It is time that Michigan legislation sees the state's car no-fault system for what it is: a failed political experiment that has forced drivers from Metro Detroit to the western Upper Peninsula between paying their car insurance premium or buying food, "said lead director Tricia Kinley in a statement.

" For some, it's like a second mortgage. "

Michigan's Republican-led Senate and House elaborate proposals expected to provide motorists with the" choice "to buy car insurance policies

The followers of Michigan's motor insurance system claim that the repeal of state lifelong medical This would mean an important safety net for some injured motorists and eventually force more residents into bankruptcy and state health insurance

Other long-discussed reform ideas include a fee schedule for medical service providers that calculates the amount they pay insurers for injured patients in car accidents

The Democrats also want to prohibit insurers from using non-driving factors such as postal code or gender to set interest rates that are particularly high in urban areas like Detroit.

Legislators have years It has long been attempting to reform the state's auto insurance laws, but efforts have been interrupted over and over again, with intense lobbying by hospitals, the insurance industry, and lawsuit attorneys.

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