Should state’s catastrophic injury fund be used for road repairs?

On Behalf of | Mar 22, 2019 | Catastrophic Injury And Wrongful Death |

If you’ve never had to use it, you may be unfamiliar with the Michigan Catastrophic Claims Association’s (MCCA’s) fund for motorists who suffer catastrophic injuries and whose medical claims are greater than $550,000 ($580,000 as of July 1). The head of the MCCA recently appeared before the state’s Senate Insurance Banking Committee (SIBC).

The hearing was part of the legislature’s efforts to gather information as they work to reform our state’s no-fault auto insurance system. However, the group is fighting efforts by some legislators to use money from that fund to pay for road repairs.

Gov. Gretchen Whitmer is seeking a $2.5 billion tax increase to pay for those repairs. Some lawmakers are asking why some of the $20-plus billion in the fund can’t be used for that purpose. The testimony of the MCCA’s executive director renewed questions about the fund and its management.

The fund gets its money from auto insurance companies — charging them $192 for every registered vehicle. They pass the cost on to their policyholders.

While $20 billion is no small amount, the MCCA says that its liabilities are even greater — over $23.5 billion. The money in the fund is being used to help pay for some 18,000 catastrophically injured people — many of whom require long term care. Because a lot of those injured motorists are young, that care could be necessary for many decades.

The executive director said that due to the nearly $3 billion shortfall, “we’re relying on investment income to pay a lot of claims. We can’t be giving away our investment income for other purposes right now.”

Although the MCCA was created by the state legislature, it operates as a nonprofit organization outside the government. Critics have claimed that it operates in secret. Even the chair of the SIBC referred to it as “that mysterious organization.”

But the executive director pushed back on that characterization, citing the public availability of the organization’s audits and annual reports. He also disputed claims that the MCCA uses some of its funds for lavish board meeting, saying, “It’s a deli tray for lunch.”

If a loved one suffers catastrophic injuries in an accident caused by another driver, it’s essential to find out about all of your options for compensation for what will likely be significant medical and long term care costs. An experienced attorney can provide valuable guidance.

FindLaw Network

Connect With Us Tell Us About Your Legal Needs And Questions