Turning 65 Might Cause Your Michigan Auto Insurance Premiums To Spike

May 16-- May 16--LANSING -- Gary Kimbel says he got an unexpected and unwelcome surprise for his 65th birthday -- a nearly $2,000 hike in his annual auto insurance premiums.

Kimbel, a Macomb Township resident and retiree from Chrysler and the UAW, said his premiums for two vehicles driven by him and his wife jumped by that amount when he became eligible for Medicare.

"I sure wasn't expecting that," said Kimbel, who has an excellent driving record. "You would think that the older you get, the easier things would be."

Kimbel, 66, and other seniors with similar experiences who contacted the Free Press say they'd like to see lawmakers address the issue as they work on bills aimed at lowering Michigan's highest-in-the-nation auto insurance premiums.

Insurance industry officials say that Kimbel's experience may be more extreme than most, but that many Michigan motorists see significant hikes in their no-fault auto insurance premiums once they become Medicare-eligible.

That's because when many people join Medicare, they move from a health insurer who pays auto-related medical claims ahead of their auto insurer, to Medicare which will only pay auto-related medical claims after auto insurer coverage is exhausted.

"Some health insurance plans will 'coordinate' benefits where the health insurance company pays first in the event of an auto accident," Jeff Levin, owner of Levin Insurance Agency in Commerce Township, told the Free Press in an email.

If a retired autoworker or someone else who is similarly covered turns 65 and moves to Medicare, he or she would no longer qualify for a coordinated policy and, everything else being equal, their "auto policy is likely to go up," he said.

Levin said it is difficult to generalize, but the increases he has seen in such situations have generally been closer to 10% than to what Kimbel experienced.

Kimbel, who after his increases pays about $4,000 a year to insure his 2017 Dodge Ram pickup and the 2019 Jeep Grand Cherokee his wife drives, said he'd like lawmakers to address the issue as they work on no-fault reform, so other seniors don't experience what he did.

"I don't believe I should be punished when I turn 65, or anyone else should be," he said.

Republican lawmakers in the state House and Senate have approved separate plans they say should mean significant savings for Michigan motorists, largely by offering options other than the unlimited catastrophic medical claims coverage now in place, which is unique to Michigan.

Democratic Gov. Gretchen Whitmer has said she will veto either bill if it comes to her desk, saying neither guarantees significant savings and neither does enough to stop insurance companies from using non-driving factors, such as ZIP codes and credit scores, in setting rates.

Whatever bill finally gets approved, it can't change the fact that Medicare, which is governed by federal laws and rules, won't pay first on medical claims arising from auto accidents.

But Tricia Kinley, executive director of the Insurance Alliance of Michigan, said people in situations similar to Kimbel's could still reap considerable savings by having options about what level of medical coverage they want to purchase.

"This is a perfect example of why Michigan should allow people to have choices," Kinley said. "When you mandate people to have coverage they may not need or want that coverage," and when they already have medical insurance, "they're really being forced to pay for health care twice."

The bills now pending offer a range of personal injury protection coverage (PIP), from as little as zero or $50,000, to as much as $500,000 or the unlimited coverage now in place.

Once PIP limits are exhausted after an accident, the injured party would submit any additional claims to the insurer for the at-fault party, said Kinley, who added that only a small percentage of such claims result in litigation.

"If covered by Medicare, military or other public insurance, any excess medical claims will be covered by those policies under the terms of that coverage, similar to private health insurance," she said.

Kimbel said he would probably opt for a lower amount of PIP coverage, given the option.

Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on Twitter @paulegan4. Read more on Michigan politics and sign up for our elections newsletter.

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