All Michigan drivers with auto insurance will receive a $400 per-vehicle refund next spring, Gov. Gretchen Whitmer and a top regulator said Tuesday.
Their announcement came more than a month after the governor requested the checks by citing a multibillion-dollar surplus in the Michigan Catastrophic Care Association fund. The account, which reimburses insurers medical and other costs for people seriously injured in crashes, is funded with an annual per-car fee that was mandatory but became optional in 2020.
“Michiganders have paid into the catastrophic care fund for decades, and I am pleased that the MCCA developed this plan so quickly after unanimously approving my request to return surplus funds to the pockets of Michiganders,” Whitmer said in a statement that attributed the surplus and refunds, in part, to a 2019 law she helped enact with the Republican-led Legislature.
The law requires refunds equal to the difference between the association’s assets and 120% of its liabilities. The Democratic governor had sought a $5 billion refund. The association, which quickly backed her request, instead supported a $3 billion refund.
The board “sought to issue the largest possible refund to policyholders while maintaining sufficient funds to ensure continuity of care to those catastrophically injured in motor vehicle accidents,” MCCA executive director Kevin Clinton wrote Monday to Anita Fox, director of the state Department of Insurance and Financial Services.
Insurers will issue checks within 60 days of getting the funds from the MCCA, which may transfer the money to the companies as soon as March 9.
Starting in July, the law curbed or cut what hospitals, residential care facilities and home providers can charge auto insurers for care. The insurance industry had said it was being gouged and applauded the pending $400 refunds, which will be issued earlier than required by law. But critics say the slashed reimbursements have led to people losing care and access to care.
Reimbursements for post-acute services that do not have a Medicare code were reduced by 45%, “leaving accident survivors in a state of chaos right now trying to figure out where their care is coming from and what’s going to happen when their care providers just can’t sustain operations anymore,” said Tom Judd, president of the Michigan Brain Injury Provider Council and director of quality assurance for Origami Rehabilitation, which has two Lansing-area facilities.
Affected services include care in adult foster homes, attendant care in homes and transportation.
Judd said the refunds are appropriate if the MCCA can keep the system sustainable but also called them a distraction from stalled efforts to fix the law.
“We would hope that the governor in particular and legislative leadership would put that kind of focus on making sure (injured) people are being taken care of because they haven’t done so to this point,” Judd said. (AP)