Wasn’t me!

Whose fault is it anyway?

Michigan has the some of the best insurance in the union, unfortunately also the most expensive. This is a layered complication. It was designed to minimize litigation. Personally, I cannot say it accomplished its goal. What it did do is create an imbalanced system: Bottom line, lawyers always and insurance companies always win.

These are businesses so naturally they are designed to make money. The problem comes when the insurance companies do not want to pay claims and the lawyers want to get paid that much more for their time. Most people do not know that when you close your mortgage there are often two deals. One at closing and the resale of your loan after closing. It is done to manage risks. Insurance is the same way. There are what is called re-insurers. Insurance companies will sell your risk to a re-insurer, and sometimes it is even layered again. It is about the management of risk.

In Michigan, it becomes a unique world of companies all teaming together against you, the consumer. Taking into consideration health insurance, medical insurance, malpractice insurance, long term care insurance, property and casualty, and other specialty insurances, it creates a great ball of confusion. Now tie in pharmaceuticals, ambulatory care, durable medical equipment, doctors, hospitals, and the AMA. Wow! Can you imagine all that in a room during a law suit? First, let us address the unmanaged billions of dollars in lifetime coverage payout sitting in a next-to-nothing holding account. If properly managed, the interest or capital gains could help reduce the cost of coverage.

 If you talk to people in other states that have tragically different coverage in settling permanently damaged citizens, they only wish they lived in Michigan. What I have found to be undiscussed or undisclosed is the pay out schedule of services provided. For instance,  lets say a hospital provides an MRI to a Medicare recipient, the hospital bills that MRI at say $400. If it is a Workmen’s Comp case, the same hospital bills the insurance company at about $800. But, if it is an auto accident related claim, the same hospital bills your auto insurance company, not your medical insurance company, at about $3800....

There is no structured or policed billing caps. This one aspect would reduce risks or claims by billions. Which in turn would reduce the cost of your medical portion of coverage on your auto policy. I think this would be a great place to start, rather then eliminating coverage? Once we control or standardize billing, we can take a tremendous cut out of expenditures. I think we should explore the options. 


-Jeff Jones