"MRI … $484; MRI for no-fault … $3,278"
Under the state’s “no-fault” system of auto insurance claims and payments for catastrophic injuries resulting from auto accidents, Michigan drivers have unlimited medical coverage, with bills paid through a fee attached to everyone’s auto insurance. The system’s been around since the early 1970s, but insurance companies have become more vocal in their opposition since medical costs have surged in recent years.
The billboards, the product of the Coalition for Auto Insurance Reform, an insurance industry group formed to change the no-fault law, have a simple message: medical care costs more under Michigan's no-fault system. The billboards list the cost of an MRI charged to no-fault coverage ($3,278), and the cost of something labeled simply “MRI” ($484).
The figures accurately report two data points in most statistics gathered by AAA Michigan, but do not include all pertinent information. Both figures are the average price of an MRI of a lower back. The $3,278 figure represents the average cost of that MRI in Detroit, the most expensive area of the state for medical care. The same procedure in Lansing costs $2,057 under no-fault coverage, and $2,057 in Grand Rapids.
The $484 figure is the price in Detroit for the same MRI covered by Medicare. In the rest of the state, the average Medicare reimbursement was $452.
By using the Detroit figures, the gap between no-fault and Medicare appears larger than a state-average.
Using Medicare reimbursement for such a comparison also is a tad misleading, because Medicare and Medicaid reimbursements are lower than reimbursements from traditional health insurance plans. In other words, that MRI in Detroit that cost Medicare $484 would likely cost Blue Cross Blue Shield more.
Overall impression: The billboards are effective in their simplicity, but may boil down a complex topic too much. Missing is the fact that there is very little public outcry to change the no-fault system, and that the push to reform no-fault is driven primarily by the insurance industry. And while dumping no-fault would save insurance companies money, it’s not guaranteed that those savings would be passed on to consumers.
Representatives of the insurance industry, hospitals and Gov. Rick Snyder are still talking about the issue. Most of the ads are down at the moment, but Tom Shields of the Michigan Insurance Coalition says they could reappear when the topic heats up again.
Truth Squad call: Technical Foul. While the numbers used are accurate, they represent the most egregious example. A statewide average would be more informative and would still make the same point – that no-fault procedures do indeed cost more.