No-Fault Auto Insurance Reform Devastates Local Residents

The law was scheduled to go into effect on July 1, but Teresa Hughes, a Middleville resident, didn’t have any concerns. Like many, she was under the impression that her son, Troy, would not have his care revoked.

“They all said there’s nothing to worry about,” she remembered. “‘Nothing to worry about. You’ll be grandfathered in. He paid for that insurance. And it’s his until he dies.’

“But that didn’t happen.”

When July 1 came, Teresa watched Troy, like thousands of people across the state of Michigan, lose their quality of care as caregivers were let go and services were cut back. But then the unthinkable happened: After 13 years of living at the Spectrum Neuro Rehab homes, Troy was kicked out. To the disappointment of his mother, Troy had to move to a nursing home.

“That’s his home,” Teresa said. “It’s not a sterile hospital room. It’s where he’s lived for the last 13 years. His bedroom’s there. His housemates are there. Some of the same people have been working there the entire time. And they all care and love him.”

Before July 1, Michigan’s no-fault auto insurance law allowed people in serious vehicle accidents to receive 100 percent reimbursement for their medical costs. Everything Troy needed, he received and he didn’t spend anything.

President of the Michigan Brain Injury Provider Council Tom Judd called it “the best system of care in the country for auto accident victims.”

That all changed on July 1.

In an effort to lower some of the highest auto insurance rates in the entire country, the state legislature slashed reimbursement rates. Most notably, the new law established a “fee schedule,” separating services that Medicare and non-Medicare payable codes could cover.

For Medicare payable services, such as physical therapy, speech therapy physicians and nurses, people can receive reimbursement up to 200 percent coverage.

But for non-medicare payable services, such as in-home services and residential care, reimbursements rates were cut by 45 percent.

“Would our legislators, would all these insurance agents, would they take a 45 percent pay cut? Absolutely not,” asked Amy Henney-Planck, who owns an at-home medical care business in Hastings. “But yet, I’m supposed to take a 45 percent pay cut?”

Sinas Dramis Law Firm personal injury attorney Steve Sinas, a no-fault expert, said the legislature did not take enough to consider the ramifications of the no-fault reform. The law sped through the legislature in a matter of weeks and passed in the middle of the night without room for public comment.

“This is why people get screwed over when governments pass laws that they don’t even understand without time for public comment,” he said. “And then the political parties convince everybody just to say yes, just because they think it’s in their best political interest to do so.”

The reform has impacted people across the state of Michigan, including multiple Barry County residents. The Reminder published a story on Sept. 18 about Jesus Arias, a Hastings Charter Township resident who was in danger of losing his in-home care. The Banner then followed up by writing two pieces on Oct. 14 and Nov. 18 about Troy Hughes, a Middleville native who had been pushed out of his home Spectrum Neuro Rehab closed its doors to 30 people.

As a result, Troy moved into a new room at a Spectrum nursing home. But socially, the atmosphere just isn’t the same, said Teresa. Troy rarely leaves his room, if ever. He doesn’t know his caregivers. He doesn’t have a roommate to hang out with. Teresa usually finds him sitting in his chair, alone.

“Sad, very sad,” she said. “It’s just not fair to throw him into a sterile hospitalized kind of life in a room where there’s half the staff so he would just be sitting there staring at a TV all day long.”

Troy doesn’t receive the same level of care either. He only receives weekly showers, Teresa said. When she calls the center, she doesn’t always get an answer.

In adult foster care homes, like the Neuro Rehab homes, Judd estimates that caregivers work with anywhere from 3 to 5 patients. In nursing homes, like one Troy currently lives in, that number can balloon from 10 to 12.

For months, lawmakers touted the legislation as a win for Michigan drivers. Before the reform, car owners were required to choose expensive unlimited coverage for personal injury protection, which raised auto insurance rates across the state and discouraged some from buying insurance altogether. Now, people have the option to choose their coverage options.

As a result of the new law, Department of Insurance and Financial Services Director Anita Fox noted rates have gone down across the state and at least 50,000 previously uninsured drivers have purchased insurance. As of mid-October, State Rep. Julie Calley (R-Portland) said she had heard of at least 26 new auto insurance agencies opening in Michigan. The new reform stripped the law of consumer protections that disallow auto insurers from using factors such as marital status, gender, occupation and credit score to determine someone’s rate.

But people are still losing their care and, in some cases, dying.

In response to the changes, lawmakers set aside $25 million to support people like Troy Hughes who had expected to be grandfathered into the system. The money would hold them over until the legislature compiled enough “data” to find a more viable solution.

“It’s actually collecting data and understanding – what do these services cost?” Calley said. “What are the expenses that are incurred? Obviously, they need to make something above that, or they’re not going to stay in business, right? So we want to make sure that it’s a sustainable system that properly supports these businesses or individuals, depending on the size of the provider.”

But there are a few problems. For starters, the $25 million is not enough to sustain an institution like the Spectrum Neuro Rehab homes.

“Even $25 million, it seems like an extraordinary amount of money, it isn’t going to sustain the program work in perpetuity,” she said. “We want a long-term solution for patients. That might be a band-aid for a bit of time for some providers, it might help us over the next few months, but it’s not going to sustain the program forever.”

And there’s an even bigger problem. As The Detroit News reported on Dec. 16, no one has touched a cent of the $25 million.

The issue has captured the attention of people across the state. Seventy-five media outlets have written hundreds of news stories, the Michigan Brain Injury Provider Council estimates. Protestors marched in front of Michigan Senate Majority Leader Mike Shirkey’s home. Even the local Barry County Farm Bureau insurance agency expressed public support in changing the law.

But nothing has changed, and many suspect nothing will change.

“They’re going to come up with all kinds of excuses why it’s not the time,” Steve Sinas said of the legislature. “There’s too much power within both parties that want to support these laws, that don’t want to do anything to acknowledge they’ve done anything wrong.

“...I don’t have any hope that there’s going to be a good-faith attempt by either political party to change any of the fundamental unfairness.”