Restoring Full Care to Victims of Catastrophic Auto Accidents Suffering Under Michigan’s New Auto Insurance Reforms

Restoring Full Care to Victims of Catastrophic Auto Accidents Suffering Under Michigan's New Auto Insurance Reforms

Category: Catastrophic Injuries

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A bad auto accident can change everything in an instant. Metal meets metal, metal meets flesh, flesh meets concrete, and your anticipated future disappears. Before the accident, you had capabilities, competencies, plans, and hopes that become irrelevant to your new future. From now on, you might need help to get out of bed, get dressed, use the bathroom, eat, drink or even breathe.

And a bad auto accident could happen to anyone who gets in a car as driver or passenger, who rides a bicycle or even a pedestrian hit by a car. It could happen to any of us.

If you got into one of those terrible accidents in Michigan under the old auto insurance law, though, your insurance would pay for the services you would need. Ever since Oct. 1, 1973, all drivers had to pay for unlimited personal injury protection coverage (PIP) as part of the old no-fault insurance law.

One teenager survived an accident that cost the control of her body from the shoulders down. Dr. Owen Perlman, her doctor, describes her life after the accident: With medical care, attendant care and a home modified to accommodate her disabilities, she completed high school, then college, and then earned her Ph.D. She got an academic job. She married and had children.

She had the terrible fortune to undergo a catastrophic accident and the good fortune to have this accident under the old no-fault law. In the words of State Sen. Jeremy Moss, “The old law enabled victims not just to live, but to have a life.”

But under this law Michigan had the highest auto insurance premiums in the United States. From the beginning, opponents have tried to repeal expensive provisions of the law, especially mandatory unlimited personal injury coverage. After decades of activity, they succeeded.

A bipartisan bill offering the option of lower personal injury protection and cutting benefits even to those who opt for unlimited coverage, was signed into law by Michigan Gov. Gretchen Whitmer on May 30, 2019.

The New Law

According to a statement of the Department of Insurance and Financial Services of the State of Michigan (DIFS), “Mandatory unlimited Personal Injury Protection (PIP) medical benefits proved too expensive for many Michigan families. Some drivers who could not afford costly unlimited coverage were driving uninsured.”

But that meant that if your catastrophic auto accident in Michigan happened after July 1, 2020, you no longer could count on unlimited medical benefits. The law somehow also cut benefits from survivors of catastrophic injuries who were already receiving care under the old law. Anita Fox, director of DIFS, explains that the new law “didn’t change what an accident victim is entitled to; an accident victim is still entitled to anything related to their medical care rehabilitation. But it changed the amount that their providers could be compensated by the insurance company for that care.”

Cutting compensation does mean that patients sometimes cannot get the care they need. This was not an unforeseeable consequence of the law. Robert Wittenberg, now treasurer of Oakland County, then a representative in the Michigan House (D), explained his vote against the law: “I absolutely foresaw the problem, and I was worried about the quality of care accident survivors would receive.”

A bipartisan group of legislators opposed cutting benefits to survivors who were already receiving care and opposed the sharp limitations to “unlimited” care for future victims.

Dr. Perlman’s patient was one of those who got reduced care under the new law. With reduced payments for daily care, and unable to pay for an attendant to get the patient dressed and safely to work, the patient lost her job and, consequently, her home. Survivors of catastrophic injuries now often wind up in nursing homes.

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