When it comes to auto insurance and the injury coverage it provides, Michigan is either way out of step or way ahead of its time.

Whichever it is, state insurance law is unlikely to change any time soon given public insecurities about health care in general.

Michigan auto insurers last week made a pitch for modifying what no other state has: unlimited medical coverage for injured drivers and their passengers. It's been mandatory here for nearly three decades.

If you're injured in a car wreck, your insurer and/or employer covers the first $420,000 in medical bills. The Michigan Catastrophic Claims Association covers everything beyond that. That coverage, including this year's $123-per-vehicle cost for the catastrophic care, is expensive.

The average auto premium in Michigan last year was $1,128, similar to premiums in states with at least some health coverage mandates on policies.

But in neighboring Illinois, Indiana, Ohio and Wisconsin, the average premium ranged from a high of $848 to a low of $706. In those states, health coverage is optional.

Michigan voters were asked twice in the 1990s to cap medical benefits and promised hundreds in savings in return. Both times they firmly vetoed the idea. And given the legislative resistance to revisiting the issue now, lawmakers apparently believe the public hasn't changed its mind.

Insurance lobbyists acknowledge that they face a tough job in getting lawmakers to replace mandatory unlimited medical coverage with choices ranging from unlimited coverage to $50,000 coverage. According to a study commissioned by the Insurance Institute of Michigan, consumers opting for the lesser coverage could save 16 percent on their bills.

In an analysis of 70,000 accident injury claims, 94 percent of the injuries cost less than $50,000 to treat. The average was less than $4,000.

Only one-half of one percent of all injury claims were more than $400,000. That means about 4,100 of the 82,000 people injured in traffic accidents last year in Michigan would fall into that category. The average cost of an injury in that relatively small pool of claims exceeded $1.4 million.

Who would pay that bill if the MCCA didn't? In other states accident victims receive coverage either through their employer's insurance, as long as they are still employed, or Medicaid, the state-federal health plan for the poor.

If Michigan motorists don't want to go there, it's because they think the cost for catastrophic coverage is better than an alternative that could involve bankruptcy. Insurers say with better cost controls, the price could drop to $80 a year. But is even that irrational given the minimal risk of severe injury?

Worry is the central driver behind a looming national health debate that will soon reshape how medical care is funded in America.

If you're among the working uninsured, you worry not only about how to pay for the doctor's visit, but the crushing cost of a week-long hospital stay. If you have employee health insurance, you worry about being laid off or pushed into retirement with little or no coverage.

It's true consumers want to choose their doctors. It's also true that they don't want to be financially ruined by medical bills incurred through no fault of their own, whether it's some guy running a red light, or cancer.

Conservative politicians say the public would never embrace a Medicare-style system of national, universal health insurance for all because it smacks of "government-run" medicine.

But the Michigan Catastrophic Claims Association, funded through a $123 car tax, isn't much different from tax-supported Medicare. And Michigan motorists seem to think it works pretty well, even if the only thing it may ever buy is peace of mind.

The difference from Medicare is that you don't have to be 65 to get it. Though limited to accidents, the MCCA may well be the only government-mandated health insurance program in the country designed to provide medical care to everyone, regardless of age or income.

That the public here has embraced it is significant. It could mean that the concept of catastrophic coverage nationally for all injury and illness -- hospitalization, essentially, since an appendectomy can be a financial catastrophe -- could well be turn out to be a very popular idea.

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By Peter Luke

© 2007 Michigan Live. All Rights Reserved.

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