“There are very few cost restraints,” he says. “No treatment protocols. No fee schedule.”

A dozen states have no-fault auto insurance laws but only Michigan's law provides unlimited medical care under personal injury protection (PIP) coverage.

Auto insurance policies cover up to $500,000 with the rest of medical costs reimbursed by state-sponsored Michigan Catastrophic Claims Association, which is funded by assessments to insured drivers. The MCCA is basically a reinsurance mechanism, since insurers cannot find reinsurance for the risk of writing auto insurance in Michigan.

Kuhnmuench says insurers and some lawmakers are looking to “save the system,” which right now is becoming increasingly unaffordable to a residents. About 20 percent of Michigan motorists are uninsured and that number could rise without auto insurance reform, he adds.

Rep. Pete Lund, R-Shelby Township, has introduced HB 4936, which looks to give drivers four options for medical coverage—$5 million, $1 million, $500,000 and $250,000.

“Even at the $250,000 limit, about 99 percent of claims are covered,” Kuhnmuench says. But drivers could save up to 40 percent on insurance coverage if the bill passes, he adds.

The tiers give drivers options, he says. The limit of $5 million is basically unlimited medical-care coverage. Only about 125 claims in history have reached this plateau, Kuhnmuench says.

HB 4936 also established a fee schedule in hopes of bridling costs. A fee exists for the state's workers' compensation system.

Reimbursements under the no-fault system are much higher than workers' compensation or Medicare reimbursements.

For instance, providers in Detroit are reimbursed $162 for a spine x-ray that costs $41.60 and $54.75 under reimbursements from Medicare and workers' compensation, respectively.

Legislation is being supported by lawmakers, who seem to think reform would “level the playing field for charges,” Kuhnmuench says. The bill will be debated soon and could move within the next couple of weeks, he adds.