PA-21 is the main law that reformed Auto No-Fault Insurance in Michigan. This act introduces disastrous fee schedules (45% pay cuts to providers), attendant care limitations (56-hour limit for families), and several loopholes for insurance companies to exploit. PA-22 deals mainly with reforms to the type of insurance people can buy – essentially allowing Michiganders to save a few dollars in their insurance bill in exchange for extremely limited coverage… thus gutting No-Fault. Importantly, neither law includes a retroactive clause, but the wording specifically grandfathering survivors in was quietly removed from its final version before passage.
Providers are only able to bill a percentage of Medicare rates, or if there isn’t one, for 55% of what they were billing in 2019. Since most post-acute care such as home care, certain therapies, wheelchair equipment, etc. is not covered by Medicare, this in effect cuts payments to most providers by half. When this became effective in July 2nd, 2021, several providers started going out of business or stopped accepting auto patients, effectively destroying the post-acute care industry in the State.
Something unique to Michigan was the ability for family members to leave their jobs to become full-time home care providers for injured loved ones. For example, a mother could take care of her son, or a wife could take care of her husband, with activities ranging from dressing to toileting to wound care and ventilator care, day and night. This allowed families to stay together and not have a stranger in their home. The reform capped this care at 56 hours per week, or the equivalent of 8 hours per day, forcing families to care for their loved ones without pay, as they cannot find home care agencies to do the other 112 hours per week. (Most shutdown or stopped taking auto patients.) Some families had to ship their loves ones to nursing homes out of state, others are spending down their lifetime savings, and yet others have now lost their homes. All are stressed, desperate to find care, and uncertain of their loved one’s future.
Michiganders have paid a fee (not a tax) in their insurance premiums to go towards the catastrophic fund, managed by MCCA (a secret group of insurers with no oversight and shielded from Freedom of Information Act requests). This fund pays for care after a catastrophic accident, for any reasonable and necessary services after the first half million. (For most spinal cord and brain injury survivors, that half million is quickly spent within the first 1-4 weeks of an accident). Michiganders who were in serious accidents and have been depending on this fund – all paid for by their MCCA fees – were guaranteed care for life under their auto policies, that is, until this reform ripped it away. Although the law does not specifically say that it is retroactive, insurers and Governor Whitmer’s administration, including her insurance regulator and attorney general, continue to argue in court that it is, and thus survivors from accidents before 2019 are now subject to the cuts imposed by this reform. The text that specifically grandfathered them in was intentionally and quietly removed before passage without the knowledge of most legislators.
This reform was passed at 2:30am, without giving stakeholders such as doctors and survivors a chance to participate in hearings. This reform was previously put to a State-wide vote – twice – and two times was rejected by Michiganders at the ballot box. Yet it was passed in secrecy and urgency in 2019 by legislators from both parties, with input only from insurance companies. (More at silentcrash.net) May loopholes in the text have allowed insurers to deny and delay benefits in an unprecedented scale, with some providers going 3 months or longer without payment and families being forced to work for less than minimum wage.
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