Court: No-fault changes don't apply to most crash survivors injured before 2019
The Michigan Supreme Court has ruled that thousands of people catastrophically injured in car crashes prior to June of 2019 will have the costs of lifetime care covered by insurance companies.
The 5-2 decision said caps on payments for medical expenses don’t apply to most people who were injured before the law signed by Gov. Gretchen Whitmer was enacted in June of 2019.
The goal of the law was to make auto insurance in Michigan more affordable. But personal injury attorney George Sinas said there was tragic cost as people who had coverage then lost it.
He said the Michigan Supreme Court decision helps set that right.
“The estimates are that it exceeds 18,000 people that have had their rights restored and more importantly have had hope restored,” he said.
In this case, families sued two insurance companies. The companies cut off benefits, arguing the 2019 law applied to everyone, including those crash survivors who were injured before it was enacted.
But a 5-2 majority of the court agreed with crash survivors and caregivers that there’s nothing in the law that says it was intended to apply retroactively.
“A number of us who worked together on this had a conference call and we just all cried together."
— Peggy Campbell, caregiver for a crash survivor
Peggy Campbell said she was “elated” when word of the Supreme Court decision came down. She is the caregiver for her sister, who was catastrophically injured in a crash.
“A number of us who worked together on this had a conference call and we just all cried together,” she told Michigan Public Radio.
Campbell said the decision means families like hers can be paid by insurance companies if they are the care providers. Or, she said, they can afford to pay for the constant care and services required for people who have suffered severe brain or spinal cord injuries and are often paralyzed.
But, because the court did not rule on anything other than benefits for people injured before June of 2019, Campbell said the decision does not help people injured after that.
“And so agencies won’t be able to take care of them,” she said. “They will not have the benefit of therapy or transportation or durable medical equipment or home modifications, so they will not reap the benefits of this court ruling.”
People also died waiting for the ruling. Advocates mourned the death of Brian Woodward, who was left quadriplegic as the result of a 1983 crash.
According to the Coalition Protecting Auto No-Fault (CPAN), Woodward’s insurance coverage allowed him to work as a computer analyst for Ford Motor Company, participate in a choir and other activities, and own a home. The loss of no-fault benefits was fatal to him, said CPAN President Tim Hoste.
“Brian Woodward was a fighter,” said Hoste. “He successfully fought to live a productive and fulfilling life despite the lifelong impact of his auto accident. He fought to be heard about the cruel injustices of Michigan’s auto reform law. The fact that he died the morning this decision was issued speaks to how long this battle has dragged on.”
“You can’t reasonably expect to save Michigan drivers money while obliterating a key cost control measure like the fee schedule.”
— Erin McDonough, Insurance Alliance of Michigan
But an industry group said the decision is bad news for people who have to pay auto insurance premiums in Michigan.
“Today, the court let down consumers across Michigan and opened the floodgates for overcharging for medical procedures and higher rates,” said Erin McDonough of the Insurance Alliance of Michigan. “You can’t reasonably expect to save Michigan drivers money while obliterating a key cost control measure like the fee schedule.”
But McDonough said in an online video that the industry is pleased that the scope of the decision is limited.
Gov. Whitmer said her office is reviewing the decision.
“I know that our legal counsel is still reading through all the documents and making sure that we have any questions that need to be answered (are) answered and then we’ll figure out what next steps look like -- if next steps are necessary,” she said.
State Rep. Julie Rogers (D-Kalamazoo) said that’s something the Legislature should take a new look at. Rogers sits on the House Insurance and Financial Services Committee.
“So we still have work to do on things like the fee schedule, things like the 56-hour cap on family attendant care,” she told Michigan Public Radio.
Rogers said that includes a look at how insurance companies use geography to determine rates, despite the fact that using ZIP codes is outlawed. Insurance rates in Michigan remain among the highest in the nation.
Legislative action on the 2019 law has largely waited for the Supreme Court to issue a decision in one of the most closely watched cases of this session.
Now, that the court has ruled, that work can go ahead when the Legislature returns from its summer recess.
Michigan Radio’s Tracy Samilton and WDET’s Eli Newman contributed to this report.