Crash or cash: Survivors say $400 insurance refunds like being robbed [The Record-Eagle, Traverse City, Mich.]

Dec. 12--LANSING -- Government officials and insurance companies last week lauded an announcement that no-fault reforms will prompt a $400 per vehicle premium refund for Michigan drivers, while critics say the money should be used to care for car crash victims.

"I feel like I'm being robbed," said Thomas Deller, of Farmington Hills, who was severely injured in 2005 after being hit by a car. "They're taking away my insurance that I paid for. I paid for that. For years. And they have no right to take it away."

Deller is one of an estimated 18,000 people injured in a car crash whose care is being paid for with insurance claims filed under Michigan's prior auto insurance law, according to data from the Michigan Catastrophic Claims Association.

No-fault reforms passed in 2019 aimed to cut the state's notoriously high premiums and did so by dropping the unlimited personal injury protection requirement and slashing reimbursement rates car insurance companies must pay to care providers.

Drivers now have a choice between $250,000, $500,000, unlimited lifetime PIP coverage or can opt out entirely if they can show they have other health insurance covering auto-related injuries.

That has meant a massive surplus in the Michigan Catastrophic Claims Association fund, first created in 1979 by the state legislature for the sole purpose of paying for medical expenses of people injured in car crashes.

On Monday in a letter to the state's Department of Insurance and Financial Services, the MCCA said it would return approximately $3 billion of a $5 billion surplus to drivers who were Michigan auto insurance policyholders as of Oct. 31.

"In determining the Refund Per Car, the MCCA's Board of Directors sought to issue the largest possible refund to policyholders while maintaining sufficient funds to ensure continuity of care to those catastrophically injured in motor vehicle accidents," the letter states.

Erin McDonough, executive director of the Insurance Alliance of Michigan, a trade association, said in a statement the refunds were proof no-fault reforms were working to save drivers money.

"This refund adds to the mountain of evidence that reforms passed with bipartisan support by the Legislature and signed into law by Gov. Gretchen Whitmer are working and delivering real savings to drivers across the state," McDonough said.

But car crash survivors, their family members and some home health care professionals say they are the ones paying the cost.

For example, on Jan. 1, 2019, M & M Home Care of Livonia was charging about $28 per hour for attendant home care -- dressing, bathing, turning and assistance with mobility and medication, for example.

The state's new car insurance law says companies like M & M can now charge no more than 55 percent, or $16, of what they were charging in 2019.

That plunge in pay rates has caused some home health care providers to close or stop taking auto clients and intensified the existing staffing crisis in home care, said Kris Ruckle-Mahon, of Traverse City, whose daughter, Brittney Ruckle, survived a car crash in 2007.

"I call agencies and they tell me they have no one to send," Ruckle-Mahon said. "Even if I wanted to go around the agencies and hire people myself, there's no one to hire."

A limit on hours of attendant care provided by the survivor's family and friends -- or anyone they knew in 2019 -- from unlimited to 56 hours per week has further stripped care from people with complex health needs, Ruckle-Mahon said.

Deller agreed, and said the legislature should have included language in the reforms to "grandfather in" funding for people injured and receiving care before the law went into effect.

Instead, his services were cut practically overnight.

"I don't get massage therapy, I don't get music therapy -- which is crucial but a lot of people don't understand the value of -- the funding for my housing has been reduced and our recreation activities have gone to junk," Deller said.

"They're trying to play it off like we're not in danger but I can see things happening where corners will be cut to make up for the lack of funding," Deller said.

In a letter to clients M & M President Michael Malecki posted in the public Facebook group, We Can't Wait, he said the company would no longer accept auto insurance cases because the $16 per hour maximum they can charge falls far short of their own labor costs.

"I sincerely wish there was an alternative but we simply have no choice," the letter states. "M & M Home Care is not alone in this situation. Based on the significant reduction in payments for non Medicare payable services, such as Attendant Care, many providers will simply be unable to continue caring for patients."

Beginning last summer, the Michigan Brain Injury Provider Council began collecting data for a #MICareCrisis dashboard, to track companies like M & M who said they could not afford to care for patients with auto insurance funding, as well as health care jobs lost and patients without proper care.

The last update by MBIPC President Tom Judd was Oct. 18, and showed 748 patients had lost care, 45 companies like M & M were unable to take auto insurance clients and 1,548 direct care workers had lost their jobs.

After Oct. 18, however, Judd said he stopped updating the dashboard since many of his phone calls to providers went unreturned.

"These are mission-driven people who tried to hang on as long as they could," Judd said.

Like Ruckle-Mahon, Julie Anderson of suburban Detroit, has an adult child, Grant, who was injured in a car crash in 2007. She, too, has been fighting on his behalf for care since reforms went into effect July 1.

Anderson pointed out a tragic, and to her, infuriating, aspect of the new law.

"Most of the people in this situation don't have cars anymore," Anderson said. "So on top of everything else, they're not even going to get that $400."

In June 2019, Whitmer signed the bipartisan no-fault reforms at a political event on Mackinac Island, where she joked about signing a car insurance law in the only place where cars weren't allowed.

Two years later, she urged legislators to fix the reimbursement problem, offering few specifics, and sponsored bills languished in committee as elected officials left for summer break.

In July, Salli Pung, the state's Long Term Care Ombudsman, sent a letter to Senate Majority Leader Mike Shirkey (R-Clarklake), detailing problems with the law.

"These specialized services are not available in nursing homes or other long-term care settings, and the staff in these new settings have not been trained to meet the unique needs of these survivors," Pung said.

A new podcast, Silent Crash, offers political conjecture behind passage of no-fault reforms in Michigan and tells stories of car crash survivors.

In October, a new fix, the bipartisan House Bill 5500 and associated bills (HB 4809, HB 5307), with more than two dozen sponsors, was referred to the insurance committee.

Altogether 19 bills focusing on no-fault insurance -- injury care, reimbursement rates, etc. -- have been referred to committee in the state legislature, records show.

As of Wednesday, no insurance committee meetings had been scheduled in the house or the senate, records show.

In the meantime, Deller said he takes grim satisfaction from an original song, "Yo Fault," he wrote in 2018, predicting the results of no-fault reforms for car crash survivors.

"Gone from a gold standard, auto no-fault, to problems that are all yo fault," the hip hop song's refrain goes. "All minor savings at our expense. That's the way to kill your constituents."

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