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What happens to people without No Fault insurance?

October 13, 2017 by Steven M. Gursten

Comparing one woman’s spinal cord injury under Michigan No Fault to one in California shows why Michigan’s auto No Fault law is worth preserving

What happens to people without No Fault insurance?

While I’ve been making the point in several media interviews and repeatedly on the pages of this auto law blog about the profound difference in quality of life and medical care for car crash victims who live in pure tort states with those who live in Michigan, yesterday’s Detroit Free Press op-ed by Erica Coulston puts a powerful human face on it.

Erica is not an auto lawyer. She is a car crash injury victim who suffered a severe spinal cord injury. In her guest column for the Detroit Free Press, Erica compares her life and medical care to a woman in California with a similar injury who does not have access to Michigan’s unlimited necessary medical benefits under our auto No Fault law.

With House Bill 5013 — the No Fault reform plan being aggressively pushed even as I write these words by Detroit Mayor Mike Duggan, House Speaker Tom Leonard (R-DeWitt) and House Insurance Committee Chair Lana Theis (R-Brighton) — the California way of living after a catastrophic injury from a car crash could become reality for us in Michigan. And it’s not a pretty life, either.

Comparing life after a catastrophic car crash in other states to Michigan

HB 5013 offers a $25,000 cap for all No Fault benefits, including medical care. It’s not $250,000, as the bill’s supporters disingenuously claim. That leaves only $25,000 for medical expenses, wage loss reimbursements, replacement services, attendant care and No Fault survivor’s loss.

That $25,000 may sound just fine to many people who choose the lower cap amount to lower their auto insurance.

But as I explained last week on the Nolan Finley show, this is what happens to people seriously injured in car wrecks in pure tort states:

[I]f you don’t have great health insurance, and many people don’t, or they have health insurance plans with auto exclusions that don’t pay for auto accidents, or they have ERISA plans that claw back everything, what happens is, they lose everything. The reality is, they blow through all their personal savings, they have to declare personal bankruptcy because of medical debt, they get pushed onto Medicaid. And normally, if they have catastrophic injuries, then they’re warehoused in substandard facilities. And in most of these pure tort states, they maybe, if they’re lucky, have one great trauma center for TBI rehabilitation or spinal cord rehabilitation, but they don’t have the medical care that we have in Michigan because of No Fault.

Their spinal cord injuries are similar, but their insurance benefits are worlds apart

This is something Coulston can attest to firsthand. After being in a catastrophic car crash in 2001, she is confined to a wheelchair and must have assistance with most basic daily living tasks.

Coulston, of Bloomfield Hills, met Angela Rockwood, a Los Angeles resident who also was horrifically injured in an auto accident, at a spinal cord injury recovery program in San Diego.

Although both had nearly the same types of neck injuries, what happened to them under their respective states insurance systems couldn’t have been more different. To hear Coulston recount what her California friend is getting — or, more to the point, not getting — is eye-opening.

For example, Coulston’s auto insurance takes care of all of her necessary health care costs related to her car accident injury, as well as her therapy as prescribed by a physician.

Rockwood, however, must use Medicare as her primary health insurance. She was dropped by her previous health insurer, which clawed back from her small car accident settlement for medical expenses from her initial injury. She can’t afford a supplemental health plan.

“She does not qualify for Medicaid. Angela recently had a medical situation related to her injury that required imaging and other tests, which cost her roughly $5,000 out of pocket. She receives no physical or occupational therapy, but if she did, Medicare therapy benefits are capped at $3,400 a year.”

If HB 5013 goes through, anyone who opts for the $250,000 maximum coverage plan would find themselves on Medicaid fast, leaving taxpayers on the hook for $150 million.

In addition, Coulston’s insurance takes care of her medical supplies. Rockwood only gets her catheters covered (through Medicare); the rest she pays for out of pocket, at approximately $300 a month.

Limited access at home and on the road

When Coulston needs to get around, she uses a specially modified minivan that her car insurance paid for, as part of what’s entitled to her under Michigan No Fault benefits.

And Rockwood?

“Angela receives no assistance with transportation, not even to medical appointments. Her husband at the time of her injury sold their vehicle in 2001 and bought a modified van, which she is still using. But it breaks down frequently. She launched a GoFundMe campaign to raise money for a new modified van that is expected to cost $75,000.”

Coulston’s home has been modified to allow her “accessibility and independence,” including a roll-in shower and roll-under sinks. Meanwhile:

“Angela received no reimbursement for home modifications, like the portable ramp she uses to access her living room or the ramp her husband built to allow her access to and from their home. Her bedroom is accessible but her bathroom is not, so bathing and toileting are done in bed.”

Bathing and toileting are done in bed.

Let that sink in a bit.

That’s the reality of living in a pure tort state.

That could be any one of us or our family if we are ever in the wrong place at the wrong time and in a split second our lives are changed forever.

That could be us for the thousands of Michigan drivers who will have auto No Fault benefits capped at $25,000 under the so-called No Fault reform plan being pushed by Detroit Mayor Mike Duggan, House Speaker Tom Leonard (R-DeWitt) and House Insurance Committee Chair Lana Theis (R-Brighton).

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