Last-minute legislation could fix no-fault loophole

·3 min read

Jun. 12—LANSING — Survivors of automobile crashes requiring lifetime medical care are putting their hopes for continued funding in a bill introduced by state Rep. Ryan Berman, R-Commerce Township, just days before rates are set to be slashed.

After July 1, auto insurance companies will no longer be obligated to pay family members for more than 56 hours per week of care — no matter when the auto insurance claim was filed — and the reimbursement rate for services not covered by Medicare will be cut by 45 percent.

In an amicus brief filed last week in an ongoing insurance-related lawsuit before the Michigan Court of Appeals, a bipartisan group of 73 current and former lawmakers said that was not their intention when they passed auto insurance reforms in 2019.

Lawmakers had informed families and caregivers that two bills introduced weeks ago, and with multiple bipartisan co-sponsors, were stuck in committee and had little chance of being sent to the floor for a vote before the summer break.

But House Bill 4992, introduced Thursday by Berman, vice chair of the House Insurance Committee, is a more simple fix.

It's garnered the support of members of an advocacy Facebook page, We Can't Wait, as well as the Coalition Protecting Auto No-Fault and the Brain Injury Association of Michigan.

Gov. Gretchen Whitmer signed no-fault insurance reforms May 30, 2019; since then families and small rehabilitation centers like The Lighthouse of Traverse City have tried to sound the alarm.

A 45 percent rate cut could mean closure for facilities like The Lighthouse, said therapist Jessica Stark, and a halt to helpful therapies for those receiving care in their own homes.

"No one can cut their salary, or their business, by 45 percent and still be solvent," Stark previously said. "They're asking the most vulnerable people to do that and it isn't right."

Many of the state's 7 million licensed drivers were happy to be paying lower car insurance premiums once they weren't forced to carry coverage they not only didn't want, but that no other state in the country required.

Figures released Friday by the Insurance Alliance of Michigan found drivers in the state saved more than $1 billion since reforms were enacted.

The savings, IAM said, came from a dramatic reduction in the Michigan Catastrophic Claims Association per-vehicle fee — the same fund which reimburses insurance companies when an auto crash survivor's care reaches catastrophic proportions.

Still, lawmakers who signed the amicus brief and who sought legislative fixes said they did not intend for the fee rate to be "applied retroactively."

"We do not believe the Legislature intended for (insurance law reforms) to be applied retroactively," a memo signed earlier this month by members of the group states. "Many of us voted on this legislation understanding that (the reforms) would only be applied prospectively."

The date the legislature is expected to recess for a summer break is a moving target — first set in mid-June, now expected to be July 2, the same day the new rate schedule is set to take effect.

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