Michigan No-Fault Update

Yellow and Black Logo saying CPAN: Coalition Protecting No-Fault

Wherefore Michigan No-Fault?

I am old enough (70 today) to remember what it was like for persons who acquired a significant or catastrophic disability as a result of an auto accident. In particular, I remember the impact of brain injuries resulting from auto accidents. At that time I was working in a medical clinic whose focus was children and adults with severe brain injury, and there were a fair number of individuals whose injury was from an auto accident.

Once of the common problems was the inordinate length of time it took to get a lawsuit for damages finished. The insurance company for the at-fault party would simply refuse to settle and would drag out the proceedings for as long as possible hoping that the victim would die or the family would tire of the struggle. This meant that it was common for the lawsuits to take 5-7 years. In turn, this stopped meaningful rehabilitation for 5-7 years, and by that time, the settlement would typically end up going to a nursing home for no real medical or palliative care at all, much less rehabilitation.

When no fault came into effect, rehabilitation was started much more quickly, as well as more useful medical supports.

At the same time, as money became available, rehabilitation facilities also began to develop and became large and expensive operations over the decades that followed. No-fault claims were funded by a common kind of surcharge, a little like a reinsurance system.  Because of the arguments made by those who did not want no-fault to pass (that the system would be too expensive to run), the system was overfunded from the beginning, based on exaggerated claims that the insurance industry used to try to defeat the no-fault framework.

Now, the insurance industry is trying to eliminate the system entirely, or so reduce the payment framework that actual rehabilitation will be impossible. I don’t know if they get that there will be a huge increase in lawsuits if they are successful. I doubt any of the people currently lobbying against no-fault were around before it was available to people with catastrophic injuries. In any event, they don’t care. They see an opportunity to get some of the bloated assets of the no-fault fund for an extra 20 feet on their next yacht and that is all that matters to them.

At the same time, the no-fault rehabilitation industry also has assets to defend, and although this industry has dramatically improved the quality and impact of actual TBI rehabilitation, they too have those to whom they are beholden, and that isn’t just people with no-fault based rehabilitation needs.

So, there has been a long fight to alter the composition and effect of no-fault in Michigan, and that struggle has gone through many phases. The press release from CPAN linked below describes a framework that suggests to me that the long negotiations are entering what could be the final phase. The release is a good picture of the status of many of the individual issues over which the parties have struggled for a long time. It will bring you up to speed on where no-fault reform is right now.

No-fault remains a critical part of health care for persons whose lifetime care claims can be just extraordinary. If ordinary health insurance were required to pay for these, whatever savings people would have in their auto insurance rates would be eaten up by increases in premiums and deductibles in their health care, and then some. Be wary of anyone claiming to save you money on insurance. Always ask yourself what you are giving up.

CPAN press releasehttps://goo.gl/QJwL1X


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