The Michigan Catastrophic Fund Association's board voted to send refund checks to drivers in the Mitten State, the group said in a statement on Wednesday. This action comes days after Governor Gretchen Whitmer called for refunds to insured drivers under the 2019 law that lowered medical costs and made unlimited health coverage optimal.
Michigan House Speaker Jason Wentworth released a statement about the news:
"We wrote this law to include an automatic refund next year, and I'm glad our reforms have produced large enough savings for the MCCA to act immediately and return that money to the people even sooner."
Whitmer has called the news of insured drivers getting a refund. However, this law is not without controversy. Some doctors and other medical professionals have said the law doesn't protect those critically injured in car accidents. Multiple investigative pieces on local stations have uncovered cases where a person injured in a wreck cannot get the care they need because of the law.
Still, the critics say that drivers have been gouged for years and are "absolutely" owed this refund.
In response to those asking about the help for those critically injured in accidents, Gov. Whitmer said she is working with the State Legislator to get laws passed that will help.
"With regard to people who have been catastrophically injured, I know the new law has created a lot of hardship. And that is why I am hopeful the legislature will work with me on a solution for those who are injured."
She also said that she called for the refunds early because the organization's surplus was substantial.
The $675 refund is the one that is being reported the most by news outlets. However, Eric McDonough, who is an Insurance Alliance Executive, says that they are still crunching the numbers to find out what the actual refund will be:
"It's important for the MCCA board to do its due diligence and land on a refund amount that balances giving insured drivers back the money they deserve while protecting the longevity of a fund that pays for the cost of medical care for Michiganders seriously injured in car accidents."
Whitmer proclaimed that the surplus belonged in the pockets of Michiganders who have paid into the system:
"Michiganders have paid into the catastrophic care fund for decades, and these funds from the $5 billion surplus belong in the pockets of Michigan policyholders."
In 2019, drivers paid $220 into the fund. But under the new law, which went into effect in 2020, that fee stands at $86 per car. It is expected that it will keep dropping so long as the fund shows a surplus. Once it hits a deficit, the fees will once again rise.
Reporters were not allowed to attend the meeting when the vote took place. This has led to some suspicion that something was not right. Though some people have pointed out that with Covid-19 restrictions, this could have been the reason why they were trying to keep everyone safe.
As of press time, there is no known timeline to get the refunds into the pockets of Michigan drivers. Though, Department of Insurance and Financial Services Director Anita Fox did say that she hopes that the board lands on a number relatively soon. She is also advocating for them to give a timetable within the next few weeks.
It is also worth noting that the law was passed in 2019 because Michigan ranked as the state with the highest car insurance rates. This was supposed to lower costs for drivers. However, a recent survey showed that Michigan still ranks among states with the highest premiums.