Since the sweeping 2019 No-Fault insurance reform package was passed, more than 15,000 catastrophically injured crash survivors and their care providers have suffered from the drastic cost controls mandated by the change in the law. However, after hearing a case brought by two victims requiring round-the-clock care, the Michigan Supreme Court ruled the benefit reductions are not retroactive and do not apply to those injured prior to 2019.
Here is what drivers should know about No-Fault insurance and why hiring a Michigan car accident attorney is the best way to win the compensation you deserve.
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Prior to the No-Fault reforms, Michigan’s auto insurance rates were among the highest in the country. This was mainly due to the mandatory unlimited lifetime Personal Injury Protection (PIP) medical benefits included in every No-Fault policy.
This coverage included all “necessary and reasonable” medical and related services, including attendant care, for vehicle owners, their spouses and resident relatives.
In addition, there were no caps on the amount providers could charge for covered medical services, which were covered by the vehicle owner’s insurance company, regardless of who was at fault for the accident.
Therefore, eliminating mandatory unlimited lifetime PIP medical benefits and implementing cost controls for providers was part of an overall plan to reduce premium rates for Michigan drivers.
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The original lawsuit was brought by two auto accident survivors who were catastrophically injured prior to the 2019 No-Fault reforms, which significantly reduced reimbursement for many life-sustaining services required by patients with severe, permanent injuries.
Because the new law did not include a specific “grandfather clause,” the victims’ insurance companies drastically reduced their reimbursement rates, causing financial hardship for the patients and many facilities and medical professionals who provide life-sustaining services.
As a result, the victims sued their respective insurance companies, USAA Casualty Insurance Co. and Citizens Insurance Co., alleging the new law should not apply to people who were injured before the new laws took effect.
Several organizations, including the American Civil Liberties Union of Michigan contributed friend-of-the-court briefs supporting the victims’ legal arguments.
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The lawsuit targeted the following three issues, two cost-cutting measures and a new limit on in-home attendant care provided by a friend or family member:
In a 5-2 vote, the Michigan Supreme Court ruled in favor of the plaintiffs, partially upholding a previous Michigan Appeals Court decision. As a result, approximately 15,000 Michigan accident victims injured before July of 2019 are entitled to the same unlimited, lifetime medical services they were entitled to before the No-Fault law was changed.
However, victims injured in accidents after June 11, 2019 are subject to the current law, including the cost control measures and limits on attendant care by friends and family.
*While some of the new No-Fault laws took effect on June 11, 2019, other portions of the package had different effective dates. Policy holders were able choose lower limits of PIP medical coverage as of July 1, 2020, while the cost control measures and 56-hour limit on in-home care by a family member or friend took effect in July of 2021.
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Under the current No-Fault law, medical bills resulting from an accident are paid according to the level of PIP medical coverage selected by the policy holder. Therefore, if a victim’s policy does not include unlimited PIP benefits, medical expenses will be capped at the maximum amount stated in the policy. Under the law, coverage could range from unlimited PIP medical benefits to no PIP medical coverage (for those with Medicare Parts A and B). Other options include maximum amounts of $500,000, $250,000 or $50,000 (for Medicaid recipients).
However, when a victim requires surgery, hospitalization and rehabilitative therapy, medical bills can exceed $250,000 or even $500,000. Additionally, unlike a No-Fault policy with unlimited PIP medical coverage, Medicare does not cover services such as rehabilitation and in-home attendant care.
For these reasons, it is wise to choose unlimited, lifetime PIP medical benefits rather than opt for one of the lower coverage levels. The small difference in premium rates does not compare to the financial devastation that can result when someone with insufficient medical coverage is seriously injured.
To learn more, click here to read or download information from our extensive library of resources on Michigan No-Fault insurance.
Finally, if you are injured in a crash, contacting an experienced car accident lawyer immediately is the best way to protect your rights and receive the benefits you deserve.
If you are or a loved one is injured in an auto accident, we can help. Our experienced lawyers have the skills, knowledge and resources to win the compensation you and your family deserve.
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