A crucial case involving Michigan's auto no-fault law goes before the Court of Appeals on Tuesday. The dispute in Andary, et al v. USAA Casualty Insurance Company, et al
is about whether the law applies to people injured before the law was passed in 2019.
The law imposed fee caps for the care of people severely injured in car crashes.
In most cases, the fees don't actually cover the cost of providing the care. So health care providers are going out of business, leaving patients without the care they once relied on. Advocates of Michigan's auto no-fault system say some patients are being institutionalized, some have landed in hospitals, some have died as a result.
Attorneys for insurance companies say the state legislature intended the fees caps to apply to all crash victims, whether the injuries happened before or after the law passed.
Attorneys for crash survivors say the law doesn't say that. They say people injured before 2019 paid for policies with lifetime care benefits, and since it's part of the contract they had with their insurance company, that's what they are entitled to.
A ruling on behalf of the defendant insurance company is likely to expedite the closures of health care providers that have been losing money taking care of car crash survivors. More than 1,500 such survivors have already lost care, and more than 96 provider companies have discharged their car crash survivor patients, or closed entirely.
A ruling on behalf of the plaintiffs could mean the Michigan Catastrophic Claims Association (MCCA) would need to increase the fee for unlimited, lifetime Personal Injury Protection (PIP) benefits on auto insurance policies. The MCCA lowered that charge in part because the new law saved the fund money that would otherwise have been spent to care for the most seriously injured crash survivors.
A ruling on behalf of plaintiffs could also create a type of second-class benefits situation for people with unlimited, lifetime PIP who are injured after 2019, compared to those injured before 2019. That is, those who sustained pre-2019 injuries could remain eligible for unlimited, lifetime benefits at a fee that covers the cost of their treatment. But those with unlimited PIP who sustain injuries post-2019 would be subject to the fee cap — the same fee cap that is driving many providers out of the business of caring for car crash survivors.
