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Will No Fault reform farce fly in lame-duck?

December 15, 2016 by Steven M. Gursten

Limitations on in-home, family-provided attendant care will leave car accident victims without care for more than half the week; cap on No Fault benefits treats uninsured pedestrians and passengers like second-class citizens rubber-ducky-lame-duck

Leave it to the House Republicans, the Michigan auto insurance industry and the hospitals to not miss an opportunity to sneakily stick it to the little guys – in this case, car accident victims and consumers in desperate need of lower car insurance prices.

Word on the street is that during these last few days of the Michigan Legislature’s lame duck session, the GOP, the insurance companies and the Michigan Health and Hospital Association are peddling some horrendous new “reform” proposal to gut the No Fault Law of vital protections.

The two principal nightmares that are being dreamed up are:

  • Hammering away at the number of hours of in-home, family-provided attendant care that auto insurers will be required to cover.
  • Eliminating the guarantee of unlimited No Fault medical benefits for uninsured car accident victims (such as passengers and pedestrians) and replacing it with a cap of $400,000.

Not to be overlooked is the creation of a Michigan Automobile Insurance Fraud Authority, which will focus exclusively on “automobile insurance fraud” committed by insured customers and other persons against insurance companies, leaving insurers who commit fraud against their customers and car accident victims to continue in their fraudulent ways with impunity.

Nothing has been officially introduced, but a supposed draft of this mess is making its way around the Capitol.

Significantly, there are two monumental omissions from the proposal:

  • No savings: The draft bill contains no promise, guarantee or mention of the savings that consumer would be assured of – or at least, be able to expect – if the proposals became law. So, you know what that means? If consumers don’t benefit, then the only folks who will are the already highly profitable insurance companies.
  • No medical-provider fee schedule: For years, Michigan’s auto insurance companies have been railing against the hospitals and doctors, accusing them of price gouging by charging higher prices for services provided to car accident victims (which are paid for by No Fault insurers) than they would charge if the services were being paid by workers compensation, private health insurance or Medicare/Medicaid. The auto insurance lobby has demanded repeatedly that a No Fault medical-provider fee schedule was the most important change that must be made to the No Fault system. Now, in a draft proposal, which they clearly played a pivotal role in creating, there’s not so much as a peep about the fee schedule. Dropping it must have been part of whatever deal they struck with the hospitals.

Now, let’s talk about the other proposals, which anti-consumer, anti-victim effects warrant zero action now during lame-duck, and indefinitely into the future.

Punishing people who love their family members enough to provide attendant care

I don’t know what’s being whispered in lawmakers’ ears, but there has been absolutely no evidence released to the public to suggest that there’s anything wrong with the attendant care covered by No Fault that this punitive proposal against providers makes any sense.

People don’t give up their jobs, their lives, their hobbies, their dreams, their time and energy to provide attendant care for a loved one who was seriously injured in a motor vehicle accident because it’s fun, exciting, glamorous and lucrative.

They do it because they love these people and they know that no one (even some of the biggest-hearted nurses and doctors) is going to care for their family members the way they will.

It’s a disgrace that they should be treated like money-grubbing low-lifes as this absurd proposal endeavors to do.

That said, this cockamamie idea, which targets in-home, family-provided attendant care, proposes the following:

Relieving Michigan No Fault car insurance companies of the obligation of providing “coverage for more than 56 hours per week of attendant in the home if the attendant care is provided” by one of the victim’s family members, a member of the victim’s household or work or social friend.

No problem, right?

So long as there’s only 56 hours in a week!

But there’s not. There are 168 hours in a week and for car accident victims who need help 24/7, this shameful proposal leaves them without care for a total of about four and a half days each week.

Whoever authored this proposal – and whoever agrees to it – has obviously never met (and most certainly never cared for) a seriously and possibly catastrophically injured car accident victim. This is outrageous, reckless and cruel. The drafters and supporters of this proposals should be ashamed of themselves.

Treating uninsured car accident victims as second-class citizens

Under existing Michigan No Fault Law, uninsured auto accident victims (such as passengers and pedestrians who don’t have access to insurance through policies of their own or a spouse or household relative) are afforded the same protections and benefits as everyone else:

They’re guaranteed unlimited No Fault medical benefits for as long as the benefits are “reasonably necessary” to the victims’ automobile-accident-related care, recovery or rehabilitation.

To claim those benefits, motor vehicle accident victims file a claim with the Michigan Assigned Claims Plan and so long as they’re not “obviously ineligible,” the MACP will assign their claim to an auto insurer that will provide the benefits that guaranteed under the No Fault law. (See MCL 500.3173a(1))

But, for reasons that are very far from clear, House Republicans, the auto insurance companies and the hospitals think this fair and equal treatment is no longer warranted.

To start, they want to eliminate the guarantee of unlimited benefits and replace it with a $400,000 cap for car accident victims seeking No Fault benefits through the MACP.

In cases of serious and catastrophic injuries, such a cap will be woefully inadequate and leave victims without the means to get the care they need.

Alternatively, this will shift costs that are currently borne by the No Fault system to the auto accident victim in the form of higher health insurance costs and out-of-pocket costs … and it will shift costs to taxpayers in the form of higher Medicaid/Medicare tax burdens.

What makes this all the more galling is its lack of necessity. Under existing law, Michigan auto insurers are reimbursed for payments they’ve made on claims they’ve been assigned by the MACP. (MCL 500.3175(1)) Plus, “[r]easonable costs incurred in the handling and disposition of assigned claims … shall be” factored into the prices that the insurers charge to car insurance consumers. (MCL 500.3176)

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