Michigan’s new no-fault insurance reform law was touted as the solution to some of the highest insurance rates in the country. Not surprisingly, what has emerged from the legislature and the governor’s office is more like a runaway truck about to strike thousands of accident victims, with possibly disastrous results. Why the governor went back on her campaign promises not to do exactly what she did remains unknown at this time.
Put together quickly and passed without public hearings, the legislation is full of holes that leave gaps of uncertainty regarding changes to Michigan’s no-fault insurance legacy.
Our new legislation will only minimally reduce overall premiums, and most consumers will unwittingly end up with worse medical benefit coverage than they had before. Why? Because unless you choose to save less money by choosing unlimited coverage, your benefits will be capped. This means that, when your benefits run out, you’ll be forced onto the Medicaid platform, which would be disastrous for most complex medical issues. Unless you choose wisely, the days of lifetime coverage for your care, rehabilitation and recovery after an accident will be gone.
Since 1973, PIP benefits for accident victims (medical, wage loss, replacement services and attendant care) have been paid by the individual’s own insurance company, regardless of who was at fault. Ours has been the only state to designate the funds to provide lifetime care for seriously injured auto accident victims. The Detroit Free Press reports that between 16,000 and 18,000 Michigan residents have suffered spinal cord injury or brain injury from traumatic auto accidents, and obviously their medical bills are astronomical.
Under the new law scheduled to take effect on July 1, 2020, drivers can choose from three levels of medical coverage, $50,000 for Medicare recipients, $250,000 or $500,000, or a no-limit option (not required to be offered by insurance companies), with premiums that reflect these new limits. After reaching the limit, accident victims, while still in the course of their treatment and recovery, will need to sue the driver who caused the accident to attempt to recover the money they’ll need to pay their exorbitant medical bills.
For more than 25 years, I’ve represented thousands of seriously injured clients who have suffered the devastating financial and personal consequences of insurance companies denying their claims while they are still hurt, unable to work and needing treatment. We will continue to represent those injured accident victims and to litigate aggressively against insurance companies.
There is no question people will be forced into bankruptcy as they struggle to cover their ongoing medical needs. With these changes, the volume of accident-related lawsuits is about to explode, and accident victims will be left to deal with the fallout, potentially broke and often unable to get the treatment they need for years later. What a sham.
Making matters worse, the new law allows facilities treating and rehabilitating brain-injury victims to bill only 55% of their current rate. Health care providers across the state predict their facilities will simply shut down, because they won’t be able to afford to operate at that level of funding. Accident victims will be relegated to nursing homes where the specialized care they need simply is not available.
What can you do to best protect yourself in this new coverage environment?
- First, don’t gamble with your future: choose the unconditional, uncapped coverage. It will be more expensive than the alternatives but may save you a lifetime of physical and economic pain if and when you need it.
- Second, shop diligently for your insurance. Especially because capped coverage is a new approach in Michigan without a valid historical basis for comparing prices, premiums are likely to vary widely among insurance carriers.
- Finally, phone or email your legislators to demand that they rethink, reconsider and revise this law.
As it stands, this legislation is a boon for insurance companies and a devastating legislative blow for Michigan drivers. The onslaught of lawsuits will be agonizing for many, but far worse will be the substandard care and economic ruin that may ensue from this “reform” law, further injuring those who need and deserve better than this. Now is the time to be vocal about our health care and those who seek to control it.