Few Michigan drivers understand the changes coming at midyear in the state’s automotive no-fault insurance law that will require them to choose the level of medical coverage.
Results of the survey the Michigan Health & Hospital Association commissioned show “millions of drivers don’t even know that this new law exists, let alone how to navigate it,” said Ruthanne Sudderth, the association’s senior vice president for public affairs and communications.
As a result, the MHA plans to conduct a public awareness campaign for this coming the spring to help drivers understand the pending changes that take effect July 1.
“The law that will be taking effect in a few months is much more complex than the current law, especially when it comes to personal injury protection choices that folks will have in just a few months,” Sudderth said. “Our goal is to educate drivers, and make sure they understand the choices that are available to them, so that they have as much protection as they can afford for themselves and their families. This is about educating drivers and making sure patients are protected.”
Under the no-fault law enacted by legislators last May and signed by Gov. Gretchen Whitmer, consumers will have to choose what level of medical coverage gets fixed into their auto insurance policies. Currently, Michigan is the only state in the nation whose auto policies have unlimited medical coverage that provides lifetime care for people traumatically injured in vehicle crashes.
That changes July 1 with the new law that gives people the option of still buying unlimited medical coverage with their auto insurance, or choosing:
- Up to $500,000 in medical coverage per person, per crash
- Up to $250,000 in medical coverage per person per crash
- Up to $250,000 in medical coverage per person per crash with exclusions under certain conditions
- Up to $50,000 in coverage per person per crash under certain conditions
- To opt out of medical coverage, also known as personal injury protection coverage.
Consumers who opt for a lower level of medical coverage will pay lower rates for their auto insurance policies. Research has repeatedly shown that auto premiums in Michigan are among the highest in the nation, which proponents of changes in the state’s no-fault auto blame on unlimited medical coverage.
MHA opposed changes to the law.
“Our intent for the campaign is not to debate whether the law is good or bad, but to give Michigan motorists the information they will need if they’re going to be able to make informed choices going forward,” MHA CEO Brian Peters said. “At the end of the day, it will always be important that motorists — and all Michiganders — have coverage and access to the health care services they need, and the MHA is committed to doing our part to ensure that happens.”
To better understand how drivers view the new no-fault law and coverage options, the MHA hired Livonia-based market research firm Escalent Inc. to survey consumers across the state.
The online surveys with more than 1,000 consumers was conducted last September, nearly four months after Gov. Whitmer signed no-fault auto reforms into law. Results found that at the time, just 12 percent of insured drivers were “very familiar” with the law and 35 percent were “a little familiar.” The remaining 53 percent had just “heard of it” or were “not at all familiar.”
“The new auto no-fault law will affect every single Michigan motorist, but right now Michigan motorists just don’t know much about it,” said Stacy Sims, Escalent’s research director.
“This state is largely uninformed about a new law that could lower premiums for some consumers, but have other financial and medical consequences as well,” Sims said. “We saw that a lot of consumers were looking for additional information, or they sought information out on their own, and there are still a good portion that need more.”
Among the 947 insured drivers who took the survey, nearly one-quarter said they would completely opt out of personal injury protection in their auto coverage and a little more than half would not. Of the 58 people surveyed who were uninsured, 43 percent would opt out of personal injury protection and 28 percent would include some level in their auto coverage.
Cost by far was the top reason consumers cited for wanting to opt out of personal injury protection. Cost was cited by 38 percent of drivers and 67 percent of uninsured drivers for not wanting medical coverage written into their auto insurance policy.
Consumers now covered by Medicaid and Medicare were more likely than those with commercial health insurance to opt out of the medical coverage, according to the results of the Escalent survey.