Updates About Auto No-Fault

Senators Mary Cavanagh (D-Redford Township) and Sarah Anthony (D-Lansing) introduced Bills 530 and 531 to amend the 2019 Auto No-Fault Law that restricted the reimbursement amount for health care services. The two bills would restructure the reimbursement process within Medicaid, increase the reimbursement rate for services to 250% of what Medicaid pays, and create a non-Medicaid fee schedule. The bill also outlines that insurance companies need to pay for individual caregivers for up to 16 hours per day as well as a change to the accreditation requirement. These changes are for those who were in an auto accident on and after June 22, 2019.

House Bill 4397 of 2019 was signed on June 22, 2019, and intended to amend Michigan’s no fault auto insurance law. The 2019 bill removed a portion of this law that made car owners pay for Personal Injury Protection that paid for unlimited injury costs after a catastrophic car accident. This allowed drivers to not pay for this provision and choose the level of protection they want. However, the 2019 auto insurance bill lowered the amount insurance companies had to pay by up to 45% and limited access to health care services. Auto accident survivors found themselves not able to either pay for their services or being denied by services due to their insurance provider.

The Democratic Senators hope that Bills 530 and 531 will increase accessibility to these health care services. These bills were introduced on September 26 and have been referred to the Committee on Finance, Insurance, and Consumer Protection, which is chaired by one of the bill sponsors, Senator Cavanagh.

The approximately 17,000 who saw their catastrophic care coverage severely limited following the enactment of the 2019 auto no-fault law had a major win on August 25 when the Court of Appeals ruled that the retroactive application of the reform violated the Contracts Clause in the Michigan Constitution.

In the opinion for Andary v. USAA Casualty Insurance Company, issued by Judges Douglas Shapiro and Sima Patel, the judges found that the Legislature failed to clearly specify that the law was to apply retroactively. Those who were injured prior to the new law, under their previous insurance contracts, were guaranteed medical expense care and reimbursement at levels set in those contracts.

Changes in the auto no-fault law, which went into effect in July of 2021, limited reimbursement for family-provided attendant care to 56 hours a week. It also capped a health care provider’s reimbursement for services not covered by Medicare by 45 percent of the fees set in January 2019.

*Andary v. USAA Casualty Insurance Company *was remanded to the Ingham Circuit Court where prospective coverage could be considered. An attorney for the insurance company has said they plan to appeal to the Michigan Supreme Court.