Lawsuit Challenges No-fault Auto Insurance Reform Law

The guardians of two victims of catastrophic crashes and a brain-injury rehabilitation facility challenged Michigan’s new auto insurance law arguing that the no-fault auto insurance reform is unconstitutional. The pending limits on reimbursement rates for nursing and other care is a violation of their constitutional rights and should be challenged in court.

The lawsuit challenges two sections of the reform regarded as unconstitutional. One of them is the reimbursement limitations for in-home caregiving services provided by loved ones and the other one is about the fee scheduled to be reimbursed to medical providers. This is based on a statement by the Coalition Protecting Auto No-Fault. They urged the governor to correct the injustice this law will generate.

Two insurance companies are named in the lawsuit filed in Ingham County Circuit. The lawsuit seeks a declaration that the two provisions of the no-fault law are unconstitutional. Gov. Gretchen Whitmer had signed the legislation in a bid to lower car premiums by allowing motorists to receive unlimited medical benefits with a start day in July.

The law will cover compensation to the family of the victim at 56 hours a week or 8 hours daily. It also comprises fee schedules to limit car insurers coverage for in-home care, rehab, and recovery. Starting next July, rehabilitation centers are going to be reimbursed at 55% only, and the rate will eventually drop to 52% by 2023.  So far, rehab centers and doctors have been able to charge auto insurers more than private insurances out there but that won’t be the case in the future.

The law limits reimbursements for in-home attendant care services and sets schedules for health providers. Dr. Michael Andary, guardian of one of the plaintiffs and wife, Ellen Andary, who sustained fatal injuries back in 2014 when a drunk driver hit her car on U.S. 127, says he will have to hire outside help since the 24-hour care provided by family members won’t be reimbursed. According to the suit, she received 36 hours of caregiving, which include 12 hours of skilled care and 24 hours of unskilled care.

In-home attendant care decisions are important decisions the families of victims injured in catastrophic accidents must make. Survivors should not rely on the government to make these important decisions for them and determining who comes into their homes to provide care. The premium Ellen Andary was priced and sold based on the basis that the policy will cover full in-home attendant care services notwithstanding the identity of the service provider.

Supporters of the law say the reason why premiums are so high in the state is the lack of fee schedules and the state’s mandate for unlimited medical coverage. But Michigan has historically been among the states charging high auto insurance rates since drivers are required to purchase auto insurance policies that include lifetime coverage in case a catastrophic crash occurs. More than 2,000 people, including individuals catastrophically ill in auto accidents, had gathered outside the Capitol last week to rally against the law hashtagged #FixTheFix with the slogan “Fix the Broken Promise.” Protesters and lawmakers had also criticized the late-night passage of the bill.

Sources
  • https://www.michiganradio.org/post/people-rally-against-state-s-auto-no-fault-law-capitol

  • https://www.insurancejournal.com/news/midwest/2019/05/28/527583.htm

  • https://statenews.com/article/2019/09/activists-rally-at-capitol-against-no-fault-auto-insurance-law

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