The MCCA: Protecting Victims of Severe Auto Injuries

For Michigan drivers who have suffered catastrophic injuries in an auto accident, the Michigan Catastrophic Claims Association (MCCA) plays a vital role in ensuring they receive the ongoing care and benefits they need. The MCCA is a unique non-profit entity created by the Michigan Legislature to reimburse insurance companies for Personal Injury Protection (PIP) claims that exceed a certain threshold. Here's a closer look at how this important system functions:

What is the MCCA?
The MCCA was established in 1978 as part of Michigan's no-fault auto insurance laws. All auto insurers operating in Michigan are required to join the MCCA and share in the cost of providing unlimited lifetime medical benefits for catastrophic injury claims. The MCCA is funded through an annual per-vehicle assessment charged to all Michigan auto insurance policies. This assessment, which is set annually by the MCCA board, goes into a single pool that reimburses member insurers when an individual PIP claim exceeds a certain dollar amount.

What Qualifies as a Catastrophic Claim?
Under the current MCCA rules, a catastrophic claim is defined as a PIP claim where an insured person's allowable expenses from an auto accident exceed a certain monetary threshold. For the period of July 1, 2023 through June 30, 2025, this threshold is $635,000. Some examples of injuries that commonly trigger catastrophic claims include: - Traumatic brain injuries - Spinal cord injuries resulting in paralysis - Severe burns - Amputation of limbs - Permanent cognitive impairments Essentially, any auto accident injury that requires intensive, long-term medical care and rehabilitation has the potential to become a catastrophic claim once expenses exceed $635,000.

How Catastrophic Claims are Handled
When an auto accident victim's PIP claim reaches the threshold, the following process occurs:
1. The insurer providing the PIP benefits notifies the MCCA that the claim has become catastrophic.
2. The MCCA reviews the claim details to confirm it meets the criteria as a catastrophic claim.
3. Once approved, the MCCA begins reimbursing the insurer for all future allowable expense payments made on that claim.
4. The insurer continues to directly pay the victim's medical providers, attendant care, lost wages, etc. and then seeks reimbursement from the MCCA.
5. Reimbursements from the MCCA continue on an ongoing basis for as long as the victim requires care related to the auto accident injuries.

This reimbursement system ensures that catastrophic injury victims can continue receiving unlimited, lifetime medical benefits as intended under Michigan's no-fault laws. Their insurance company remains responsible for initially paying the claims, while the MCCA acts as a reinsurance pool to prevent any single insurer from bearing the full financial burden.

Funding the MCCA and Setting Assessments
To maintain a sufficient pool of funds, the MCCA charges an annual per-vehicle assessment on all insured vehicles in Michigan. For the period of July 1, 2022 to June 30, 2023, this assessment was set at $292 per insured vehicle. The MCCA's board of directors, which includes representatives from member insurers, sets the assessment amount each year based on actuarial calculations. Factors like the number of new catastrophic claims, medical cost inflation, and investment returns are analyzed to determine the appropriate assessment level. While this annual fee is mandatory for all Michigan drivers, it helps make the state's unlimited lifetime medical benefits possible for those who suffer catastrophic injuries. Without the MCCA's reinsurance mechanism, insurance companies may be unable to provide this critical coverage.

Oversight and Transparency
As a non-profit organization, the MCCA operates with oversight from the Michigan Department of Insurance and Financial Services. It must follow statutory requirements for maintaining sufficient funds, handling claims appropriately, and setting assessments through a transparent process. The MCCA also has reporting requirements to provide updates on its financial status, number of claims, and other operational details. This information is made publicly available to promote accountability and allow for review by the state insurance department. For victims of catastrophic auto accident injuries in Michigan, the MCCA is an essential lifeline - ensuring they have access to the care and benefits they need for the rest of their lives.

When you have been injured after an accident, having an experienced legal team which knows how to navigate the MCCA could make all the difference in the care you receive. Contact our team at AARON.LAW to begin - (877) AARON-4U