The Michigan Court of Appeals heard arguments on Tuesday in a lawsuit seeking to restore legacy insurance benefits to more than 18,000 people who suffered severe injuries in car crashes.
The state's 2019 auto no-fault law slashed payments for care for such survivors by nearly half, causing multiple care providers to go out of business, and hundreds of people to lose care.
The question before the court was whether the law could be applied to people injured before the law was enacted.
Attorney Mark Granzotto presented arguments on behalf of crash survivors Ellen Andary, injured in 2014, and Phillip Krueger, who was injured in 1990. The two plaintiffs represent the entire class of people who had been receiving lifetime medical care before the law was changed.
Granzotto said the imposition of the fee cuts on people injured prior to 2019 was a violation of their constitutionally protected contract rights. That's because the insurance policies the victims had purchased guaranteed lifetime medical care at reasonable rates.
The insurance policies also provided for relatives to to be paid a reasonable rate for home care, for as many hours as medically necessary. The new law limits relatives and friends of survivors to payment for no more than 56 hours total — whether or not the survivors need 24/7 care.
Attorney Lori McAllister defended USAA Casualty Insurance company. She said benefits under survivors' contracts with insurance companies are wholly dependent on the statute which granted them. A change to the statute changes the policies, she said.
The argument is that essentially, what the state legislature once granted, it can also take away.
McAllister also said it was clear the state legislature intended for the benefits cuts to be applied retroactively, and not just applied to survivors going forward. She pointed to clauses in the 2019 no-fault statute, as well as language in amendments made to the statute.
Granzotto countered that this intent was not at all clear. "The state Legislature knows how to make a law retroactive," he said, "but they didn't do that here."
And he noted that 73 members of the Michigan Legislature signed a letter that was part of an amicus brief, saying they did not intend the benefit cuts to be retroactive.
Insurance Committee Chair Daire Rendon has also said recently that she was assured multiple times by the drafters of the legislation that it would not be retroactive.
Meanwhile, survivors, their families, and their care providers continue to press Republican leaders in the House and Senate to modify the no fault law because of its sometimes horrific consequences, intended or not.
Numerous survivors have had to leave their homes and be institutionalized after losing care, some people with no other place to go have landed in hospitals, and some have died after losing care.
The law is also wreaking havoc on the lives of many survivors' families, who in some cases are trying to provide round-the-clock care for a severely injured loved one after losing their agency professionals.
The law is also affecting anyone who suffers catastrophic injuries after 2019. Because the home care and post-op rehab industry is slowly collapsing due to the law's fee cuts, many newly injured people also cannot find appropriate care.
