Auto insurance

Michigan Supreme Court to hear auto insurance appeal

LANSING — Michigan’s Supreme Court will hear insurers’ appeal against a landmark decision that struck down parts of a 2019 auto insurance overhaul. But the state’s high court declined to freeze the decision of the appeals court that ruled payment reductions unconstitutional for certain injured motorist care before the law came into effect.

The High Court’s order on Thursday leaves in place the State Court of Appeal’s August ruling on appeal, good news for people who have sued with the rehab clinics for brain injuries and home care agencies.

The bipartisan law is credited with lowering high insurance premiums, but has been criticized for reducing reimbursements for post-acute services. The Michigan Catastrophic Claims Association, which issued reimbursements of $400 per vehicle this year, cited the appeals court ruling last week while raising the fee from $36 to $48 per car from the next summer. The non-profit organization, whose board is made up of representatives from the insurance industry, also pointed to lower-than-expected returns on investment.

The Supreme Court will hear arguments in Andary v. USAA in March.

“Today’s decision brings a new breath of hope to the thousands of motor vehicle crash survivors and care providers whose mission is to provide the services these people deserve across the state,” said said Tom Judd, executive director of the Michigan Brain Injury Provider Council, in a statement. statement. “While this matter is not yet settled, we hope the insurance industry will follow the law and allow the restoration of care for those in need.”

The Insurance Alliance of Michigan, an industry group, blamed the MCCA increase – the first since the law was enacted more than three years ago – on higher-than-expected claims costs due to the ruling. of the Court of Appeal.

“Everyone who got refunds of $400 per vehicle last spring will be sending $48 back to the MCCA due to the disruption caused by the Court of Appeals decision,” executive director Erin McDonough said in a statement. . The problem, she said, “is not about access to care, but about medical providers demanding an uncontrolled level of compensation” to treat those injured before the law’s effective date. in 2019.

The law, effective mid-2021, capped reimbursements at 55% of what home care companies and other providers charged for post-acute services not covered by Medicare in January 2019. The caps fell to 54% in July and will fall to 52.5. percent in the summer of 2023.

The law limited attendant care provided by the family to 56 hours per week, which the appeals court said cannot be applied to those injured before June 11, 2019.

Other key provisions of the law, such as letting drivers choose among levels of injury protection instead of being forced to buy unlimited coverage, capping insurers’ reimbursements for other treatments at about double what Medicare pays, and the mandatory reductions in the personal injury protection portion of premiums, went unchallenged in the first major test case for the law.

Under the MCCA’s fee change, drivers opting for unlimited injury protection benefits will pay $122 per vehicle, up from $86 to $74 to cover expected new claims and $48 to make up a 3-year shortfall. .7 billion. Those who choose less or no PIP coverage will pay $48 for deficit reduction, up from $0 previously.