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Michigan’s unique and generally patient-friendly No-Fault auto insurance system is facing a new proposal for significant changes.  Senate Bill 1 was passed out of committee after only 30 minutes of debate and was passed by the full Senate earlier this week.

Attempts to change Michigan’s No-Fault Act, originally enacted in 1973, come up almost every legislative session.  As it currently stands, the No-Fault Act provides payment or reimbursement for medical expenses related to a motor vehicle crash for the lifetime of the patient, as long as those expenses are reasonable and necessary for the patient’s care, rehabilitation, or treatment.

Under the new proposal, insurers will be able to offer plans that cap medical payouts or, in some cases, allow motorists to opt out of no-fault medical coverage.  In addition, the Michigan Catastrophic Claims Association, which protects insurance companies against carrying too many catastrophic cases at one time, would be phased out.

Michigan drivers should pay close attention to these proposed changes.  No one likes to think about it, but if you need life-saving and life-sustaining care after a car crash, the current system provides for that.  Under the new proposal, those costs will eventually be shifted to all taxpayers (through Medicare and Medicaid) and the injured person and his or her family.

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