Changes in Michigan No-Fault Law May Result in a 45% Reduction in Payments for Survivors of Catastrophic Car Accidents

Changes to No-Fault Laws Bring an Unexpected Side Effect: Tragedy

As many residents of Michigan know, in the 1970s the state adopted a system of “no-fault” insurance which was intended to make sure that people injured in car accidents were able to obtain any medical care that was needed as a result of the accident, regardless of who was at fault. Over the years, many have been concerned about the rising costs of Michigan auto-insurance, and the insurance industry has used this for decades to lobby for changes which would allow them to reduce benefits, claiming that this would allow them to drastically cut the costs of auto-insurance premiums. The reality, however, is that the changes demanded by the insurance industry would have less of an impact on insurance premiums than claimed, while allowing insurance companies to drastically increase their profits.

Since no-fault insurance was adopted in Michigan, it has offered some of the best benefits to auto accident victims in the country. Most significantly, Michigan auto insurance rules have promised the lifetime medical care needed for survivors of catastrophic auto accidents, many of whom have suffered amputations or severe traumatic brain injuries. Unfortunately, as of this writing, accident survivors face a 45% reduction in medical reimbursements which threatens to leave the most vulnerable people in Michigan without the healthcare they were promised.

In 2019, lawmakers were pushed by the insurance industry to pass a sweeping change to Michigan’s insurance structure, which insurance companies promised would significantly reduce rates. (Unfortunately, since that reform was passed, insurance companies have seen a massive rise in profits and drivers have seen little in the way of insurance rebates). Unless something is done, on July 1, 2021, survivors of catastrophic accidents also face having their benefits slashed.

Broken Promises: Devastation to Our Most Vulnerable Neighbors

In one example of the pending injustice, a 23-year-old survivor of an auto accident was left a quadriplegic, relying on attendant care to live independently. She and other quadriplegics rely on this attendant care to provide for basic needs to help them dress, eat, leave their home and live a basic life. This lifetime attendant care was promised as a benefit of the no-fault auto insurance that they paid for and, in many cases, the care has been provided for decades as promised. For example, one quadriplegic has received this care for 30 years, following his catastrophic auto accident injuries in 1991.

Now, a 45% cut in reimbursements mandated by the 2019 law threaten to strip away this promised care. Many agencies providing care to catastrophic injury victims expect they will be put out of business after the law goes into effect on July 1, 2021. Injury victims are concerned that they themselves will go bankrupt and there are reports of some catastrophic injury victims becoming suicidal when faced with losing critical care. Another victim describes how reductions are likely to force her into a nursing home, where she does not expect to survive. As another victim describes it, the new legislation basically allows the insurance company to break its contract by not providing the benefits it collected premiums for years ago. The Michigan Brain Injury Provider Council conducted a survey reporting that 80% home health providers expect to close their doors when the cuts go into effect. It reports that some 6,000 accident victims are expected to lose their critical care and 5,000 health care providers will lose their jobs.

As of this writing, two bills have been introduced to prevent this from happening – one by a Democrat and one by a Republican. As State Representative Douglas Wozniak, D-Shelby Township explains, he introduced his bill while thinking of his neighbor’s daughter who suffered catastrophic injuries in a car accident. He explains, “Although we have made great strides to reform our broken no-fault law, issues still need to be addressed, notably those related to post-acute rehab clinics, which many victims rely on for necessary services.” Rep. Wozniak’s observations are echoed in legislation offered by State Senator Curtis Hertel, D-Lansing, which has also introduced legislation to stop the cuts.

I truly believe that we Michiganders are better than this and that we will do what is necessary to protect our most vulnerable neighbors. If you are reading this, I ask that you please contact your state representatives and demand that they support legislation to end an immoral cut to benefits that were promised and paid for and protect the lives of catastrophic accident survivors. It is simply the right thing to do. Additionally, if you were hurt in car accident, contact our Indianapolis car accident lawyer or our Hammond, IN brain injury lawyer.