The Michigan Supreme Court says benefit caps in the auto no-fault law that went into effect on June 11, 2019, do not apply to people who were covered under their own no-fault insurance policies, and sustained injuries in car crashes prior to that date.
The Court said "the Legislature did not clearly state that it intended the new fee schedule in MCL 500.3157(7) or the new attendant care limitations in MCL 500.3157(10) to apply retroactively to individuals with a vested contractual right to PIP benefits under the pre-amendment no-fault statutes, which means that these provisions do not apply to any insured who was injured while covered by an insurance policy issued before June 11, 2019."
The 5-2 decision was greeted with joy and relief from severely injured crash survivors and their family members. Thousands of crash survivors in Michigan lost some or all of their medical care after the law passed.
Maureen E. Driscoll Howell is the mother of a man severely injured in a car crash and an advocate for changing the law. On Facebook, she said:
“We WON 5/2 on retroactivity. Now those injured before PA21 passed are safe. We have to work to save the others injured who will not be affected by the Andary decision. We now have two levels of care in MI. Those who get the care they need to survive and those poor souls who so [sic] NOT! Let’s pour our joy and energy into fixing it for ALL!"
The 2019 no-fault law was passed in the late-night hours during a special session of the state Legislature, days before Governor Gretchen Whitmer, with much fanfare, signed the bill on May 30 on Mackinac Island.
The legislation contained what some advocates for crash survivors called a “poison pill” inserted at the last minute. That poison pill capped the amount that providers could charge for their services caring for crash survivors at 55% of the previous rate.
In most cases, the resulting payment was below the cost of providing care. Home care agencies closed, or discharged their existing auto accident survivors as a result. Some survivors landed in hospitals because they lost all care; many had to move out of their homes into nursing facilities.
Many Democratic lawmakers subsequently said they did not have time to read the legislation before voting on it – and that they would not have voted yes, had they understood that the fee caps would devastate the home care industry for crash survivors.
Critics of the law say it caused great harm to some of the most vulnerable citizens in the state, without achieving its primary goal: lower car insurance rates, especially for Detroiters. The most recent state-by-state comparison from Value Penguin still ranks Michigan as the most expensive for car insurance in the nation, primarily because the average includes premiums paid by Detroiters. Detroit has remained the most expensive city in the nation for car insurance.
State Rep. Julie M. Rogers (D-Kalamazoo) issued the following statement:
“Today’s ruling by the Michigan Supreme Court is a welcome relief to crash survivors and their families. Patients should have never been subjected to a loss of health care and necessary services to treat these terrible injuries. I stand ready to work with my colleagues to address the deficiencies in the 2019 law which are not addressed by this ruling. Those injured after 2019 are still struggling with arbitrary caps and cuts in their care.”
In a statement, Erin McDonough, executive director of the Insurance Alliance of Michigan, an industry group that represents car insurance companies, called the ruling "a huge setback for Michigan’s 7.2 million drivers, small businesses and the state’s economy."
McDonough said the court's decision will allow care providers to overcharge, and that will increase insurance rates for everyone.
"Today, the court let down consumers across Michigan and opened the floodgates for overcharging for medical procedures and higher rates."
The Court’s ruling comes as some members of the Democratically-controlled state Legislature are in the process of drafting bills to modify the no-fault law, to address the issue of insufficient payment for medical care. The bills will also likely address the law’s 56-hour-a-week cap on the number of hours that family members can be paid to care for injured loved ones.
The Supreme Court opinion could lend some political urgency to that work.
That’s because the Andary decision does not apply to people injured after June 11, 2019, nor does it apply to uninsured people who were injured in a car crash prior to that date.
