Catastrophically injured auto crash victims can’t have their lifetime medical care reimbursements cut after the fact, the Michigan Court of Appeals ruled Thursday.
The ruling reversed a 2019 change to Michigan’s no-fault auto insurance law that reduced the amount insurers have to pay.
It’s a ruling that could potentially impact thousands of Michiganders who require around-the-clock medical care and have seen their benefits slashed in the wake of the 2019 reforms.
In a split decision, two of the three-judge panel ruled changing the terms of the patients’ coverage retroactively violated the contracts clause of the Michigan constitution. Under the amendments, insurers only have to pay around half of the fees charged for the patient treatment.
Because the insured accident victims had previously paid for lifetime medical care in their insurance policies, taking full reimbursement away from them afterward was unconstitutional, Court of Appeals Judge Douglas Shapiro wrote in the majority opinion. He was joined by Judge Sima Patel.
Shapiro also wrote the insurance companies didn’t prove reducing the amount insurance companies have to pay would lower insurance premiums for other drivers.
“The lifetime unlimited benefits that the insurers were paid for will be severely impaired if the amendments are given retroactive effect,” Shapiro wrote. “Defendants have not shown that retroactive application of the amendments is necessary to accomplish the goal of lowering no-fault policy premiums.”
Since the sweeping changes to Michigan’s no-fault auto insurance law in 2019, advocates for the injured have said nearly 7,000 auto accident victims that need full-time care have had their treatment ended.
Related: Nearly 7,000 crash patients have lost care since auto no-fault reform implemented
In a potentially troubling sign for the fate of the reforms overall, the court sent two of the cases in question back to a lower court to decide whether the no-fault amendments “pass constitutional muster” at all.
Appeals Judge Jane Markey disagreed. She wrote it was possible for the legislature to retroactive nullify the contracts the accident victims had with their insurance companies — in other words, their insurance policies — because they have the right to do so when the decision is “reasonably related to remedying an economic or a social need of the community.”
Related coverage:
Money for health providers impacted by auto no-fault changes advances in Michigan Legislature
House-passed bill would create fund for health providers caring for auto accident victims
Average auto insurance rates in Michigan increase slightly, but are no longer highest in nation
See the average auto insurance rate for your Michigan zip code
Advocates keep pushing for changes to Michigan’s auto no-fault law. It’s not happening this term.
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Auto crash survivors can’t have lifetime benefits cut retroactively, Michigan Court of Appeals rules - MLive.com
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