Our governor recently announced a refund of some of the fees we’ve paid into the fund controlled by the state’s Michigan Catastrophic Claim Association (MCCA). At this point, we don’t know when or how much, but it’s clear the governor plans to get us a refund. Here’s what we DO know.
Since its inception in 1978, Michigan’s Personal Injury Protection (PIP) program has paid billions for auto accident medical costs and is currently paying auto accident medical costs for over 17,000 Michiganders who have been seriously injured in auto accidents. The auto insurance companies and the government work together on this, and the MCCA fund is what makes Unlimited PIP possible. The MCCA fund is like Dr. Brown’s “flux capacitor” (Google it) for auto insurance! However, since our state’s auto laws changed with No Fault Reform, two things have happened: (1) more Michiganders are opting OUT of Unlimited PIP; (2) medical charges are now being paid from a fee schedule which has lowered what medical providers can charge us for auto accident medical treatment. For those of you who have chosen one of the Limited PIP options, this fee schedule will help your PIP limit last a bit longer.
Each year the MCCA fund managers create a forecast for how much money we need in the MCCA fund and what the revised annual MCCA fee will be for those of us who still cling tightly to our Unlimited PIP benefits (the best benefits on the planet). The fund managers can also determine the amount of an MCCA refund that could lower a surplus fund balance. Will we get a refund of MCCA fees AND a reduction of the MCCA fee in the coming year on our auto policies? As of Monday morning, we don’t know if both will happen.
Could a refund of MCCA fees this year contribute to a deficit in a couple of years that drives a future increase in the annual MCCA fee we all pay? Maybe. From an agent’s perspective, I’d prefer the MCCA fund balance be controlled by lowering or raising the MCCA fee each year. Why? Who gets credit for an MCCA refund? The governor! Who gets blamed if the MCCA fees go up and you get charged more for your auto insurance in a couple of years? Insurance agents! Insurance is serious business, but a sense of humor is good to have around!