GRAND RAPIDS, Mich. (WOOD) — Next time you pay the outrageous premium that all Michigan residents see on their automotive insurance bill, a Rockford woman hopes you’ll think about the care you’re helping to subsidize.
“I’m incredibly grateful, number one, that (no-fault) exists,” said Kary Scheiern, a 61-year-old retired teacher from Greenville. “Through this whole process I’ve learned a lot more about Michigan no-fault than I ever wanted to know. But I said I will never complain about it again because it’s paid for everything.”
Scheiern believes her medical bills have already topped $1 million after a July 2018 auto accident put her in three different hospitals for nine weeks.
“I had a traumatic brain injury, bleeding in the brain. I had heart damage,” she listed. “I had multiple broken bones — ribs, sternum, clavicle — my knees were crushed.”
Scheiern was on her way to yoga class when a man suffering a medical condition plowed into three vehicles along M-57 in Greenville.
“It was terrifying … to be going somewhere like a yoga class and waking up somewhere else, you have no idea what’s happened,” Scheiern recalled. “You can’t understand why you can’t move. You don’t understand that your body is broken.”
When she made it back home nine weeks later, she still had knee surgery and six months of physical therapy on the horizon.
“It’s been a long time and a hard time,” she said. “It’s been a tough year.”
She shudders to think how much tougher it would have been without the unlimited, lifetime medical benefits provided through Michigan’s no-fault insurance system.
“I’ve been told I’m a walking advertisement for no-fault because I was doing nothing. I was driving to class, to yoga class, and I was hit and woke up somewhere else,” she said. “But no-fault has saved me. We would have been bankrupt a long time ago otherwise. I am very grateful for no-fault insurance.”
Advocates for no-fault reform believe Michigan can provide adequate coverage and lower premiums by doing away with the unlimited benefits.
“Not to minimize the seriousness of (accidents), but very, very few people ever reach a threshold that they can’t afford or they don’t have other coverage for,” said Tricia Kinley, executive director of the Insurance Alliance of Michigan.
“We cannot deny there may be somebody who has to go on Medicaid, but I think we’ve got to keep in mind the bigger picture here is most people have coverage. Other states have been able to provide their drivers with lower costs and still have adequate coverage all around,” Kinley said.
According to insurance comparison site TheZebra.com, Michigan’s drivers pay an average of $2,610 each year for car insurance, which is 83% higher than the national average rate of $1,427.
Kinley and other reform advocates blame ballooning medical costs tied to unlimited benefits for Michigan’s highest-in-the-country premiums.
According to testimony before Michigan’s Senate, 42% of the premium you pay goes to fund Personal Injury Protection. In 1972, when the no fault system was created, PIP accounted for 6% of your premium.
PIP covers medical expenses of injured Michigan drivers up to $550,000. When medical expenses exceed $550,000, the Michigan Catastrophic Claims Association picks up the coverage. The MCCA currently charges insurers $192 per vehicle to cover the fund, a cost insurers pass on to drivers in the form of higher premiums. That assessment will increase from $192 to $220 per car July 1.
The MCCA reports (PDF) it’s currently servicing 18,000 open claims and has assets of $20.6 billion with liabilities of $23.5 billion.
Since its inception in 1978, the MCCA has paid out over $16.5 billion to cover claims.
There are currently two bills before the Michigan Legislature that would do away with mandated unlimited medical coverage. Gov. Gretchen Whitmer has promised to veto them if they come to her desk as they read now — but her stated concern is not the elimination of no-fault.
Despite critics’ contention that the no-fault system is broken, Kary Scheiern fears the fix may break people whose lives have already been devastated by a traffic accident.
“(No-fault) may not work perfectly (but) … tweak it,” she said. “Don’t throw the baby out with the bathwater because I can’t imagine what this would have done to us financially.”