LANSING – Unlimited medical coverage isn't going away for those who want it and its cost may drop beyond the 10% reduction Michigan's new auto insurance law requires, says the executive director of the Michigan Catastrophic Claims Association.

For the first time since 1973, the law gives Michigan motorists choices about what level of health-related accident coverage they want to buy, ending Michigan's status as the only state where motorists have been required to purchase unlimited lifetime health coverage for catastrophic injuries.

It's expected far fewer motorists will opt for the unlimited coverage in the future. Since that would result in a much smaller pool of motorists with such platinum-level insurance, there has been speculation that the unlimited option will either become unavailable or simply too costly.

Though insurers who offer it must reduce its price by 10% for eight years, the new law doesn't require insurers to offer the unlimited health coverage option.

But Kevin Clinton, a former state treasurer who is executive director of the MCCA, told the Free Press he not only expects auto insurance with unlimited coverage will continue to be available, he expects its price will likely decrease, even beyond the 10% cut that is mandated in the personal injury protection (PIP) portion of the auto insurance bill for those who opt to purchase it.

Clinton cited two reasons:

Though the pool of motorists with unlimited medical coverage will be considerably smaller, it may well be a lower-risk pool than the existing one.

The medical fee schedule that is part of the law should significantly reduce medical costs for catastrophic injuries, compared with what is paid today.

Clinton said that based on the percentages of people who chose the most expensive health insurance plan under the Affordable Care Act, it could be that only 10% to 15% of motorists opt for unlimited medical coverage under the new auto insurance law.

A smaller insurance pool generally generally equates to reduced stability, but that doesn't necessarily equate to more risk, he said.

In this case, older and more experienced drivers may tend to have more financial resources and be more likely to opt for the unlimited coverage than younger and less experienced drivers who may be looking for ways to save money, Clinton said.

Less experienced drivers generally produce more claims than more experienced drivers do, Clinton said. The two age groupings with the most claims are drivers between 16 and 20 and drivers between 20 and 24, he said. Together, those two age groups make up 17% of total claims. Also, younger drivers who are catastrophically injured will generally require more years of costly medical care than will older drivers with similar injuries.

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Clinton said the medical fee schedule included in the new law should also reduce costs for those who opt to continue purchasing unlimited medical coverage.

In a change that will be phased in over three years, the health care providers will only be able to charge car accident victims 200% to 250% of what they reimburse Medicare for the same medical treatments. Though still considerably higher than Medicare fees, charges under the fee schedule are expected to be considerably lower than they are now.

The MCCA, created by the Legislature to handle claims exceeding a certain dollar value — currently $580,000 — has assets of $20 billion and assesses an annual per-vehicle fee that is set to increase from $192 to $220 on July 1. The MCCA board is controlled by the insurance industry and is not subject to the Michigan Freedom of Information Act. It has faced criticism and unsuccessful court challenges for an alleged lack of transparency in its fee-setting.

Democratic Gov. Gretchen Whitmer signed the auto insurance bill into law on May 30. After months of negotiations that followed a decades-long impasse, the bill was rushed through both chambers of the Michigan Legislature in a day, with no public hearings on the bill, as drafted.

Tricia Kinley, executive director of the Insurance Alliance of Michigan, said "there is certainly a possibility that premiums for an unlimited benefit policy could go down more than expected since the risk pool may change significantly. However, "it is too soon to tell," Kinley said.

"The new law delays implementation of the full fee schedule until July of 2021, allowing medical providers to continue overcharging for two years," Kinley said. "Accelerating the fee schedule could certainly help control costs and premiums.”

Kinley has refused to guarantee overall premium decreases for any auto insurance customers, saying the numbers are still being crunched and noting that the new law requires motorists to purchase significantly more liability insurance coverage than they were required to purchase previously.

In any case, many motorists will see an increase in their auto insurance bills, starting next month, before they see any decrease.

When it comes to the per-vehicle fee assessed by the MCCA to cover medical claims that exceed $555,000 from catastrophic accidents, motorists will still see a 13% hike on July 1, when the fee is increased to $220, Clinton said.

Clinton said there will be significant cuts to the MCCA per-vehicle fee, starting in July 2020, for those who opt for coverage that does not include unlimited medical coverage. But he said the increase scheduled for this July still needs to go ahead, because insurance companies are not yet realizing any cost savings from the new law and ongoing catastrophic medical claims still need to be paid.

Starting in July 2020, those who select lower PIP coverage options will save at least $177 of the $220 fee, and possibly more, Clinton said. Of the $220 fee, $177 is for regular ongoing costs of paying catastrophic claims, and the remaining $43 is to reduce the fund's projected deficit, estimated at $3.9 billion, he said.

If actuarial studies show that the changes to the insurance law have also reduced the projected deficit, the savings to those drivers could be greater than $177 per vehicle, Clinton said. It will take several months to complete such studies, he said.

Asked whether the full actuarial study would be made public, Clinton said: "Generally we don't do that," but the report's conclusions will be made public.

The new law does require the MCCA to submit public reports to the Legislature beyond those it is now required to produce.

Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on Twitter @paulegan4. Read more on Michigan politics and sign up for our elections newsletter.