No-fault reform would cut high rates, but beneficiaries fear losing quality of life

While legislators again consider putting new restrictions on Michigan's no-fault auto insurance benefits, Cliff Copeland feels like he's already taken a hit on the coverage he needs.

Copeland, 48, paralyzed from the chest down from a 1996 pedestrian accident, relies on a van with a wheelchair lift to attend church and other social activities in his rural community 50 miles north of Grand Rapids. With electrical and suspension problems, the Ford Econoline van is 11 years old and breaking down.

But a 2013 Michigan Supreme Court ruling said insurance companies are no longer required to fund the full cost of a vehicle for accident victims – just the mobility equipment that comes with it.

In February, according to Copeland, his insurance company said it would pay to modify a new van. It would not pay for the vehicle itself. He said he and his wife, Denise, cannot afford that expense. “To me, it's basically like sentencing someone to jail in their own house,” he said.

“Part of my rehabilitation is being able to go out and communicate with family and friends and stuff like that. They are not just taking my van away, they are taking away my life.”

Advocates for impaired accident victims say the little-noticed court decision could leave hundreds of severely injured Michigan residents in a similar bind. Insurers say they are simply following guidelines set down in the court ruling. “It's already having an effect,” said Tom Constand, vice president of the Brain Injury Association of Michigan, a Brighton-based nonprofit advocacy organization.

“This is a quality-of-life issue. It strips away dignity. To take that away is devastating for individuals and their families.”

Fallout from the case known as Admire v. Auto-Owners Insurance Co. foreshadows a larger battle over cost versus benefit, as legislators weigh reform of the state's landmark 1973 no-fault insurance law. It is the only standard in the nation that offers unlimited medical and rehabilitation benefits for auto-related injuries.

Critics say those benefits drive up Michigan's auto insurance rates, which ranked second highest in the nation in 2013, according to Insure.com, an independent insurance consumer website.

A proposal unveiled in February by GOP state House speaker Jase Bolger would cap lifetime benefits at $10 million and require that insurance companies guarantee 10 percent savings on premiums for two years. It also proposes a low-cost insurance plan with a cap of $50,000 of coverage for low-income residents. A 2013 proposal to revamp the no-fault law with a $1 million cap stalled for lack of support.

Necessity or ‘lifestyle’

The court's recent ruling arose from a dispute between Kenneth Admire, who was seriously injured in a 1987 motorcycle crash, and Auto-Owners Insurance Company. The insurer previously had bought three vans equipped with wheelchair lifts for Admire following his accident. But in 2007 it told Admire that it would pay only the cost of modifying a new van.

Auto-Owners asserted that the state's no-fault law obligated it to pay just those expenses because Admire would have incurred transportation expenses whether he was injured or not. The state Supreme Court court agreed, stating in its 4-1 ruling last May that the purchase price of the van was not “for the claimant's care, recovery or rehabilitation” as specified under the statute.

Michigan’s no-fault insurance law is the only one in the nation that offers unlimited medical and rehabilitation benefits for auto-related injuries. Critics say those benefits drive up Michigan's auto insurance rates.

Pete Kuhnmuench, executive director of the Insurance Institute of Michigan, supports the court's decision. “There is nothing in the statute that says you have to provide transportation services. The statute wasn't designed to insure an individual's lifestyle.”

Justice Michael F. Cavanagh dissented, arguing that a “van is the only mode of personal transportation available that will accommodate plaintiff’s severe injuries resulting from the motor vehicle accident.”

Given the number of mobility-impairing accidents each year, the potential impact of the ruling appears considerable.

The Michigan Catastrophic Claims Association, a funding pool set up under the no-fault law to pay claims above $530,000, reported more than 14,000 active claims as of June 2013. For the year ended June 30, 3012, it reported 2,354 claimants.

The Spinal Cord Injury Statistical Center estimates there are more than 5,000 U.S. spinal cord injuries each year from vehicle crashes, which would equate by population to about 150 a year in Michigan. According to the Centers for Disease Control, an estimated 340,000 Americans suffer traumatic brain injury each year in vehicle accidents. That equates to some 10,000 in Michigan.

Experts believe repeal of Michigan's universal motorcycle helmet law in 2012 could add to those totals, as serious brain and spinal injuries mount. The average medical claim in motorcycle accidents climbed by 22 percent to $7,257 in the wake of the change, according to study by the Highway Loss Data Institute.

Wayne County resident Sandra Miskell, 62, suffered a closed head injury in a 2002 Oakland County accident that left her in a coma for several weeks. She is unable to drive.

Until a few months ago, her insurance company paid cab fare for Miskell to attend church and volunteer at a local animal shelter and senior citizen center. She got a letter in December from State Farm Insurance informing her they would no longer pay for those trips.

“These are activities that are not for your care, recovery or rehabilitation but are for activities uninjured people do as well,” it stated.

Calls to State Farm asking for comment were not returned.

Miskell says she can't readily afford those transportation expenses. “Those things are important to me,” Miskell said.

“I've always been an outgoing person and a doer. Now I feel like I am under the gun because of the insurance company. They didn't consult me on any of that.”

John Cornack, president of the Eisenhower Center, a brain injury rehabilitation facility in Ann Arbor, says those kind of activities are critical to rehabilitation from serious injury. He is also president of the Coalition Protecting Auto No-Fault, a group opposed to proposed changes to the no- fault law.

“Quality of life is very important to rehabilitation. Without that, you lose your hope of becoming part of a community. The cycle of depression starts. They think, 'I can't do anything. I can't see anybody.'”

Michael Harris, president of the Michigan Chapter of Paralyzed Veterans of America, got a denial letter in December from his insurance company on his request for a new wheelchair-equipped van. He was left a paraplegic from a 1986 auto accident.

Harris estimates that about 200 paralyzed veterans in his organization were injured in vehicle accidents. He wonders how many will get adequate transportation in the wake of the court decision.

“We get calls all the time from people with transportation issues. We really have no public transportation system in place. So there's no other choice for people.”

Ari Adler, a spokesman for Bolger, said he would leave interpretation of current no-fault law to the courts.

But Adler said Bolger considers the reform proposal a winner for both consumers and those with serious injuries from auto accidents. “It was very important to us to find that balance,” Adler said.

Adler said the $10 million cap would cover “99.9 percent” of catastrophic claims in Michigan. At the same time, he said, it will drive down rates by requiring that medical providers can only charge 125 percent of the rate charged for workers compensation claims. “Insurance in Michigan is too expensive,” Adler said.

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Comments

Chuck Fellows
Tue, 03/11/2014 - 7:56am
Where is the credible evidence that catastrophic claims drive up insurance rates? In fact, where is the credible evidence that the catastrophic claims fund is projected to run out of funds? An independent analysis by the Citizens Research Council funded by the insurance industry is required at this point since the insurance industry cannot be trusted. Miles being driven are decreasing. Vehicles are becoming safer and safer with much more effective occupant protections. The insurance industry is on a path to self destruction since their business model (Blaming the customer for their inability to manage effectively) is the root cause of higher and higher health care costs of all types. The legislature has not helped by repealing the helmet law, ignoring infrastructure maintenance and placing public safety at the mercy of budget cuts to support business growth.
Augie Fernandes
Tue, 03/11/2014 - 10:06am
Chuck, I echo your comments relative to legislative action or inaction on the repeal of the helmet law & highway infrastructure. I'm a motorcyclist who owns three registered & insured bikes, the cost of my MCCA recovery exceeds $500.00. Mind you I can only ride one bike at a time, with a full face helmet by the way, yet pay this recovery fee in full on each. We will all be underwriting the medical expenses of those who choose not to wear a helmet & fall victim to catastrophic injuries in an accident.
Pinne666
Tue, 03/11/2014 - 4:41pm
Chuck, I am in a quandary, as to your questioning, of the fact, that these open-ended claim payments are responsible for, the fact that they "drive up insurance rates". Are you so, one sided, in your thinking that you cannot understand that millions of dollars paid out will out will cost millions of dollars in premium charges? I am amazed at this lack of understanding and the obvious false hood of your post. I may even be able to draw a conclusion, from your zealous attempt, to muddy the water on this issue, that you may be a personal acquittance of the author Mr.Roelofs. Was it not Lincoln that said, "Fool me once shame on you. Fool me twice shame on me"? This one is quite obvious sir.
Gus
Thu, 03/13/2014 - 9:50pm
Pinne, Chuck may be on to something. An independent investigation (assuming the CRC can be truly unbiased) is a good idea. Insurance companies are "cash cows." They are great stock investments, just ask Warren Buffett, and they will say whatever they have to in order to protect their profits. (That doesn't make them evil, only prudent.) I do disagree with Chuck about insurance companies being on the road to self destruction, however. The business model is sound, and as long as the government doesn't impose stupid regs (such as with Obamacare) they'll continue to make money. I noticed that the article does not mention how much money is in the Michigan Catastrophic Claims Fund right now. Assuming the fund has a good money manager it may even be growing despite having to pay claims. (I really get tired of biased articles that don't provide all the information, and only give out what they want to make their case.) As some point this fund could even become self supporting, but the insurance companies still would not voluntarily lower their rates). I do know that car insurance premiums in MI are amongst the highest in the country (we are like the 6th or 7th highest in the country). I think an unbiased investigation is a good idea.
Sue Hart
Tue, 03/11/2014 - 9:16am
As an accident survivor, the Supreme Court decision regarding vehicle coverage is a major hindrance towards living a normal life. I was working part time and driving my van that I already owned. back and forth to work and for social occasions, shopping, etc. Now the injuries sustained in the car accident have changed my transportation needs like a lift that would take me into the van and enable me to transfer onto the driver's seat safely. The lift that I have now required me to put my chair onto it and then me walking up to the front to the drivers seat. After countless falls I need a new van with a lift that will put me in to the van. We are trying to see if the insurance company will help with a new vehicle because we can not afford those costs; especially after I lost my job due to injuries sustained during the accident. The lack of that income really makes it difficult to obtain a van that will enable me to live my life. Why is it that insurance companies can make that decision regarding accident survivor's quality of life as well as having a life? It is similar to a person that uses a wheelchair not having a ramp which would force them to be stuck in their house. Capping catastrophic claims is the wrong decision as well as the Supreme Court decision. All that decision does is to pay for attendant care services which are by far more costly than the purchase of a new van over the long run.
Eric
Tue, 03/11/2014 - 10:02am
What about if you're a pedestrian that's injured by a vehicle. Why should people be infinitely protected just because the accident is car to car. Call it the interests of the few trumping the interests of the many. The ultimate solution is to just drive less or not at all and avoid paying car insurance companies.
patrick
Tue, 03/11/2014 - 3:00pm
I agree, my father in law is the one in the picture at the top of this article. Cliff is a car to pedestrian accident. His situation is worsening as the insurance companies seem to be able to change they way people are treated with catastrophic injuries. This is absolutely unacceptable.
Denise Copeland
Tue, 03/11/2014 - 4:44pm
Patrick; You are one of the best son-in-laws a parent could have. Thank you for your support and concern and for taking the time to say a few words. You know all to well what it will be like if Cliff can no longer participate with his grandchildren, your four children, Emma who is 11, Nicholas 9, Olivia 6 and Noah 3. We are a loving family and with this new case law, our Supreme Court Judges heavy handedly placed these dear babies in harms way when they are no longer allowed to socialize and learn that all people should be able to live a full life without be discriminated against. Changing the contracts by using case law should be criminal, as I do not see this happening if an individual should no longer feel able to support the contract they entered into. I love you and your family Patrick. I hope Michigan will help support that love too by pushing back hard regarding the Michigan No Fault Life Giving Benefits! Your Mother-in-Law DeeDee aka Denise aka The Deeders!
Gregg
Tue, 03/11/2014 - 11:48am
Unlimited benefits are certainly a good topic of concern. More importantly, a good way to lower claims costs is to adopt a provider reimbursement model similar to the currently-established model for medical/clinical claims. It has been my understanding when medical providers (physicians, therapists, hospitals, etc.) charge auto carriers their usual and customary fees for services and products rendered to auto accident victims, Michigan auto carriers reimburse at full charges. This is unlike a typical medical claim where reimbursements from the Blues, Medicare, HAP, Priority, etc. are at rates established by the carriers in conjunction with their provider contracts - at rates much less than maximum charges. If this IS the case, why are the auto carriers in this "backwoods" state allowed to do this? More importantly, why is this regressive state the ONLY one in the Union doing this and offering lifetime benefit? Yes, many of these auto cat cases are complicated and long-term. So are oncology, ALS, MS, and many other patients afflicted with diseases requiring long-term clinical management and therapies. Similar to auto cases, these patients have not "asked" for these diseases but yet insurers put lifetime limits of care on them. Whether care is provided as a result of age-related issues, genetics, accidents at home, or in an auto, patients should be treated by providers in the same manner despite the cause - so why should their reimbursements be soooo much more? Follow the money trail on this one folks and that will provide you with the truth - auto carriers have no interest in changing their payment model (i.e. bringing it in line with the realities of the current market) to the medical community as this would alienate the medical community and reduce their acceptance of treating these cases at all. Another contributor to these costs is the lack of any statewide monitoring of uninsured drivers/motorists. If the Secretary of State's office knows when your driver's license is to be renewed, then why is there no system in place to identify those license holders who do not have insurance? Despite personal privacy laws that are constantly breached by the government, it is not rocket science for the SOS to tap into the State Insurance Commission data base and match the active auto insurance policy owners against actively issued driver's licenses. This would begin to ID those license owners whose policies have been terminated/expired/not in force. These licenses could be cited for non-compliance of state law unless they provided proof of conformance back to the SOS. However, ALL Michigan drivers are paying for those uninsureds who purchase and activate a policy long enough to get approval to buy their license plates, then cancel the policy and continue to drive. This has been going on for years and substantially more so with the Depression and job losses that have existed in this State for the last 15+ years.
Charles Richards
Tue, 03/11/2014 - 4:25pm
Gregg says, "Similar to auto cases, these patients have not “asked” for these diseases but yet insurers put lifetime limits of care on them." The difference between insurance policies for ordinary diseases and auto accident policies is that the policy holder has paid for unlimited coverage in the case of auto accidents. Their premiums pay for all the costs incurred; otherwise insurance companies wouldn't be selling the policies.
Denise Copeland
Tue, 03/11/2014 - 4:34pm
Gregg, You make some wonderful points. I loved reading the passion in your words and your ideas and thoughts paralleling the other insurances and payment options. Something that really adds value when we all want something to work well and for all to benefit from. I have to disagree about the automobile carriers paying at full value, as we, a Catastrophic Fund recipient family, have to suffer the repercussions of the carriers not paying the full amount billed, via billing difference amounts and sometimes delinquency notices and law suits. Sometimes I settle these differences myself or I turn it back to the carrier to resolve the issue. This has always been the case for us over the past eighteen years. I love your idea about the Secretary of State following the insureds. We should be able to build something fairly easy into our systems to make sure people who drive have insurance. That is the law. If you can't afford insurance you should not be driving, but now that gets into Michigan jobs and the likes, complicating the devastation going on with income inequality and many companies and individuals falling into the 1% trap of not paying taxes. Our most vulnerable, our marginal members of Michigan's Citizens are made to pay taxes and suffer the consequences of this growing problem. Thank you for the opportunity to share in your passion for making Michigan a better Michigan. Denise
Denise Cope land
Tue, 03/11/2014 - 2:01pm
My name is Denise Copeland and I am the wife of Cliff Copeland, pictured above in this article. I have over forty years of insurance experience, with twenty of those years as a claims examiner, supervisor, manager, team leader of a multidisciplinary workers' compensation team and a litigation specialist. I believe the Michigan No Fault Law is worth its weight in gold, to the severely disabled because it offers life giving benefits to both the injured and their family, but it also is worth it's weight in gold to the insurance carriers because there are "billions" of dollars in excess sitting in the Catastrophic Fund, which I am guessing, why the insurance companies currently are unwilling to share their financial statements, would show. If they can dismantle the Michigan No Fault Law, this money would become pure profit. They promise premium savings but they are already creating taxes and fees that would make up the piddily savings they dangle in front of the Michigan drivers and voters. Michigan will be giving up precious benefits for nothing! No savings! No cost reductions! Nothing! I have walked on both sides of this fence. Many times our carrier has denied us benefits already, but because the costs are not in the hundreds of thousands of dollars, attorney's do not want to help us, thereby we have paid out of pocket for services, medical supplies, caregiver wages, and mileage, all reasonable and necessary, but all either denied for unreasonable accounts, delayed responses or purely ignoring our phone calls and letters of resolution. The insurance companies are barely made accountable as it is. We need to be asking ourselves what kind of a state do we want to be? Are we a state of human beings, building into our citizens lives compassion and responsibility to our families or do we want to be a state catering to the large corporations who share little accountability for the human lives they are impacting with their self serving and greedy ways. As for the recent case law, Admire v. Auto Owners, our Supreme Court Judges must have ruled on this case law without the experience of having a close family member severely disabled. Their decision lacks personal experience therefore lacks facts that would rule otherwise. The Michigan No Fault Law is being whittled away at both ends, through its dismantling with reform and with case law. There should be round table discussions, but people like me, the disabled, the venders, doctors, lawyers and carriers should all be included before any reform takes place, or before dismantling this life giving law. Each round table should have a representative from each category above. Each benefit should be discussed with specific questions being answered and explored. Anything else would be a travesty for Michigan. Denise Copeland
Chuck Fellows
Thu, 03/13/2014 - 8:58am
Dear Denise, Thank you for getting to the heart of the issue: "We need to be asking ourselves what kind of a state do we want to be? Are we a state of human beings, building into our citizens lives compassion and responsibility to our families or do we want to be a state catering to the large corporations who share little accountability for the human lives they are impacting with their self serving and greedy ways."
Scott Roelofs
Tue, 03/11/2014 - 2:46pm
If I want to buy life insurance, I can buy a small policy (say $10,000), or I can buy a $1,000,000 policy and pay substantially more in premiums. Same with a disability insurance policy. With auto and home insurance policies, I can adjust my premiums up or down by deciding on a high deductible or a low deductible. I can also buy further protection with an umbrella policy. It is all about individual choice. With the Catastrophic Claims coverage, there is no choice. I have to buy the ultra-high premium CCA if I want to drive. I think most people would like to be able to make an informed choice. The downside of not having the CCA coverage is the difficulty in recovering damages from at an-fault driver. So if you are a pedestrian severely injured by a car, you would have to sue the driver if he/she does not have enough coverage. Any changes to the law need to carefully consider all angles.
Denise Copeland
Tue, 03/11/2014 - 4:16pm
Scott; I appreciate your comments about premium costs, adjustments in coverage and the likes. This is true of our health insurance industry too as you state. Something to really look at, but I think you will find that the insurance companies are going to fair much better in changing the way we purchase car insurance. We keep losing benefits in both health and auto so that the insurance companies can make huge profits. The CEO's of these large companies are now making the biggest bonuses in the history of the US as well as stock gifts and opportunities that would shock any of us. How much should one person earn or really how much money is one person worth compared to our responsibility to our Michigan Citizens and their families? As well, these companies who pay little if any taxes into our financial systems? I live in a severely disabled family, benefitting from the Catastrophic Fund, but we too have two vehicles, which one is the large handicap accessible van, and we continue to pay into the Fund, not only for us but for other families, because we are well aware of the unbearable struggles that someone has as well as their families trying to manage. You have no idea how hard every day, every minute is just to live a reasonable normal life. It behooves us as a society to support these families with a portion of our premiums. It should make us feel good to add value to Michigan and the quality of life we have to offer to those most vulnerable. We need to stand up to these large corporations and their money holders in an effort to grow integrity and compassion back into America, back into Michigan. Thank you for the opportunity to share in your concerns and ideas about our No Fault. Denise
Denise Copeland
Tue, 03/11/2014 - 3:55pm
A Battle Worth Fighting - Michigan No Fault You hear so much about those life giving benefits, those benefits that lift a person up out of a life event that leaves them severely crippled, disabled, sometimes both mentally and physically disabled to the point where they require 24 hour care, and sometimes even so severe, then nothing less than the constant care of a nurse is needed. God Bless the motorist who leaves this world all in one piece, but please, God help the motorist or pedestrian stricken with an automobile accident that shatters their life, their very being, their families lives and worse, no benefits or benefits so inadequate that a human being should suffer unto their own death from the catastrophic injuries sustained, because we cared so little for the least of our brothers. You probably are wondering why I would write such a piece, but the compassion and love I have for the Michigan No Fault Law is tied up within my very life, my very existence. No I am not an injured survivor of an automobile accident, but I am wife and caregiver of a man, not just any man, but my husband, Cliff, who has suffered greatly since 1996 when he sustained a catastrophic spinal cord injury due to a brief altercation with a significant other, where he was a pedestrian. His world changed forever, as did his family’s. He entered into a contract with an insurance carrier years prior, promising him life giving benefits, in the least, if he should ever sustain injuries of undo repair, leaving him a burden to self, family and state. Isn’t this what we all do, trust our insurance carriers to live up to the expectations of their contracts. Why would any of us, including our legal overseers, medical professionals, and citizens allow these contracts to be bifurcated, diverged, divided, split apart, dissolved? I could not be more frustrated than I am with people who think they know enough about No Fault to take it apart, make it something less than what it should be, “life giving” benefits. I reject any numbers put out until I see the spreadsheets of the Catastrophic Fund versus the number of Michigan Catastrophic Cases. Then and only then can we look at these cases in depth. I challenge the insurance company to produce their cases. I would like to review them and see what I find. Did you know that there is no “overseer” of the Catastrophic Fund? Did you know the State of Michigan turned this responsibility over to the highest seller of insurance premiums, State Farm Insurance? That’s like leaving the fox in the hen house, don’t you think? I am willing to go over every benefit my husband has benefitted from over the eighteen years he as lived as a quadriplegic. I am further willing to share our failures and successes, but I am also willing to share the affronts we have succumbed to over the years in trying to live under the rule of an unruly insurance carrier. I have forty years of insurance experience, lending titles of claims examiner, supervisor, manager, team leader of a multidisciplinary workers’ compensation team and finally a litigation specialist for General Motors in Southfield, before meeting my husband, when I became appalled at the treatment he was receiving at the hands of his insurance carrier, claims examiner and medical management nurse, and worse, medical team of experts! I knew, he had become the “golden calf” of claimants, injured to the point of total helplessness. It is these poor souls who are caught in the middle of this vicious fight over Michigan No Fault! I can only pray that someone who knows anything about the severely injured would give me a chance to offer my experience and knowledge towards an outcome of benefits for both the disabled and the insurance companies and state. As a claims person, I know that the insurance policy is not a “wish list” for those injured and their families. I know that the laws are put in place to allow for boundaries of benefits when managing insurance claim files. I know there are stockholders and money needs to be made to keep the company rolling, and profitable, as well, the board happy and stockholders earning on their invested dollars, but to what extent? Just my two cents, but I probably have about twenty dollars worth of experience and information to share that could and should make a difference to any reform of this precious Michigan Law. Denise Copeland
lj
Tue, 03/11/2014 - 5:00pm
When No-Fault Insurance was "sold" to Michigan residents, we were told our insurance costs would be lower. Did that happen? I don't think so. I believe we have one of the highest rates of auto insurance in the nation. When voters were asked to vote on tort reform "because lawyers were getting rich off of frivolous lawsuits," citizens bought the story and voted in favor of tort reform. At the time, if I recall correctly, insurance companies were already a very profitable industry. They should pay for the costs incurred by their injured parties' victims rather than having taxpayers pay through Medicaid, welfare, etc. Furthermore, a judge can impose damages upon an attorney for bringing a frivolous lawsuit, so that protection was already in place. Instead, insurers, who were already making a sizable profit, got relief and probably higher profits and Michigan's insured got higher insurance premiums. Now there is a push to relieve insurance companies of expenses related to catastrophic injuries. To state that insurers shouldn't pay for transportation costs, for example, is ludicrous inasmuch as victims can probably no longer work, their lives have been drastically changed, and insurers should be expected to provide them with the things they cannot get on their own because of the results of their injuries. Frankly, I don't believe anything coming out of the mouths of the insurers when they tell us our costs will be lower. They have exaggerated and, perhaps, out and out lied too many times to be credible. My sympathy rests with the people who have catastrophic injuries, whose lives have been drastically altered, and who will never enjoy the quality of life they had before their injuries
Don
Tue, 03/11/2014 - 5:26pm
If your want to know how the Catastrophic Claims Fund is doing, go to the web site that posts their 2012 Financial Audit and READ all of the audutor notes. The fund has $15 Billion in assets and projects liabilities at $17.5 Billion. The Liabilities shows $3 Billion for pensions of the employess of the Fund. It also shows big wages and benefits costs of $170 Million/year. The projected (loss) of ($2.5 Billion) for 2013 was done with fuzzy match that reflects the costs of open and expected claims. The fund has covered 25,000 claims since it started in 1978 and has 15,000 open claims currently. The Claims Adjusters and admininistration that get paid $170 million, are allowing charges by hospitals, doctors, caregivers and other services that are mostly 5 times higher than they can charge someones other health insurance. We are getting ripped off! Ok, I do agree that it is good to take care of the injured. But there has to be a better way. Michigan is the ONLY State that has such law. New Jersey tried it many years ago and went back to traditional insurance. The audit also shows $8 million in assets which is a nice building in Lansing to house the workers. There are 5 insurance company members on the fund Board of Directors and 1 State member. But the State member of the Board has NO VOTING RIGHT. We are not even being represented. Now ask your State Rep or State Senatore specific questions on the fund and rates etc and they cannot answer because it is not "transparent" to them nor do they have committee review rigths. The fund may be a good thing but it needs to be fixed!!!
Denise Copeland
Tue, 03/11/2014 - 9:57pm
Don, I can not say enough, how grateful I am to have people like you interested and engaging in discussion over the Michigan No Fault Law. I see the numbers you have posted and will be going over to this site to check this information out. As a claims examiner and working in the area of workers' compensation adjusting, it is no different than the liability laws that support the No Fault, the laws are different but managing the cases are exactly the same. Each insurance company has a philosophy behind their claims handling and processes, which also includes integrity, honesty, transparency, medical management, rehabilitation, reserving and litigation. I have worked for a number of insurance companies over the years and I can tell you most operate without the moral integrity we all would hope for if we suffered a catastrophic injury. On-the-other-hand, I have worked for two companies that had the moral integrity I found more to my liking when managing claims. What I found throughout my career has been a large percent of costs were spent in litigation, where as, the insurance company takes a hard stand on not administering benefits, and works with attorney's and physician's building cases to support their denials. The injured party, struggling with their life changing event finds it hard to fight back, as there is little energy left over, as every day you are fighting for your life first and fighting the insurance company takes a back seat. The law firms that represent the insurance companies are usually found in large cities, they employ a number of attorney's, paralegals, secretaries all to fight the guy who no longer has use of his arms or legs, imagine that! Twenty years ago, on my files where I determined that fraudulent activity on the injured worker's part provided me the legal obligation, and ability to deny his or her claim, and in doing so I would raise my reserves by $20,000 to $30,000 to defend our position legally, which always lead me into further adjustments to my reserve for litigation if the file continued down that path. What I am saying here is litigation costs may not even be needed if a carrier was administering benefits as they are legally bound to do through an insurance contract, but if the carrier is a "deny all", which some do, your premium and mine are mismanaged. Just think of the litigation costs now twenty years later! Also in the mismanagement of claims processing is buying doctors to write reports that allow the carriers to deny benefits. Usually these reports are written and the costs are astronomical in comparison to normal reports. These doctors also share the real risk of testifying in court on behalf of the insurance carrier. The facts are sometimes skewed to fit what the carrier and claims examiner has asked of the doctor and sometimes the facts are represented by outright lies. All of these costs, the report, testifying and additional reporting are added to the claims reserves and the projected numbers you are seeing. Some things that I have experienced in the care of my quadriplegic husband has been the insurance companies denials over changing the footplates on his wheelchair, where the design was giving him decubius ulcers on his heels. There were no work arounds to correct this, therefore we asked our examiner if we might replace each foot plate and leg lift to correct the medical problems caused by this defect in design. Each footplate and leg lift was at a cost of $250 or $500 total. Six months down the road, the costs of medical treatment to his foot problems probably exceeded $50,000! They finally replaced the leg lifts and foot plates, a little to late don't you think? I easily have ten stories just like this to add to my husbands reserves on his catastrophic case. It's issues like this that need to be explored. If people want reform, lets make it a good reform based on facts and not some pie in the sky numbers trumped up by someone who may or may not have been paid off to skew the numbers. Never underestimate what someone or some company or companies will do to secure their "golden calves"!
Charles Richards
Tue, 03/11/2014 - 6:19pm
I'm surprised (and disappointed) that Mr. Roelofs did not address the issue raised by Dr. Owen Perlman in the March 5, 2014 issue of the Detroit News. He says, "And the $10 million cap in injury care under the bill is nothing more than smoke and mirrors. At first glance it appears to be a concession to health care providers and seriously injured people. The language in this legislation will virtually eliminate auto insurers’ responsibility to cover long-term care for catastrophic accident victims in Michigan. Under Bolger’s proposal insurers would not be required to pay for auto injury claims that insurers deem to be “not reasonably likely to result in meaningful and measurable lasting improvement.” When dealing with catastrophic auto injuries, such as brain or spinal cord injuries, there comes a point when “meaningful and measurable” improvement cannot continue to be expected. In the end, the cap on care included in this bill could be $100 million and some injured people may not be able to get the care they need." This is outrageous. Representative Bolger's bill is a bald-faced fraud. But I am not nearly as impressed by Dr. Perlman's assertions about reimbursement rates for worker's compensation, auto accidents and general medical problems. He says, "The speaker’s comparison of MRI costs for auto insurance, workers compensation and health insurance ignores the fact that all hospitals are required by law to charge the same price for a specific treatment. The price of an MRI does not change based on the type of insurance. The final accepted reimbursement for the MRI will vary based on the reimbursement rate negotiated by the hospital and insurer." He is correct that hospitals have a posted list price for all procedures, but as he admits, nobody pays that list price. He goes on to say, "Big insurance companies that provide a large volume of patients may negotiate with certain hospitals for a reduced reimbursement rate, similar to how businesses with large purchasing power often negotiate discounts with vendors. To apply a workers compensation fee schedule on auto injury treatments would be like the state of Michigan unilaterally setting the price between Ford and its suppliers. Yet that is exactly what Bolger is proposing." But the state does set a fee schedule for worker's compensation and it seems to work. Perhaps his objection is rooted in the fact that he is Medical Director for Rainbow Rehabilitation Centers. And from what I have been able to learn, excess medical reimbursement accounts for a large percentage of our higher auto insurance premiums. Perhaps Mr. Roelofs can look into these issues and illuminate them in a future issue of Bridge.
Denise Copeland
Tue, 03/11/2014 - 10:48pm
Charles; If only more people would invest their time in trying to understand what is happening with Michigan's No Fault and Catastrophic Fund, we might actually find common ground in reform, but we need more and more people to get involved, share their stories and ideas, their knowledge, experiences and concerns. Thank you for commenting. A "CAP" is unacceptable as everything in the medical world changes on a dime as does the condition of the severely injured claimant. As a claims examiner, I had to project costs into the future regarding a persons injury, the projected treatment, problems and escalating medical costs associated with the natural increases for these services, medical equipment and the likes. The longer I was in the industry and adjusting reserves, the better I became at estimating costs into the future, frequently closing files with little reserves left, and not having to raise the reserves every 90 days or so. The insurance companies understand this and so does their underwriters and risk managers. The so called "CAP" lets the insurance companies off the hook, but they are in the industry of what I call "risk". The carrier as well as the insurance policy holder take a risk, will an accident or injury occur or will it not. Why should the insurance company hold no responsibility in the "risk" factor if that is what they are selling to the consumer of insurance? Why would we, as Michigan Citizens, purchase insurance for the worst case scenario, if the insurance companies do not want to pay? Why?? They are in the business of taking "risk", as are all insurance companies. Somehow they manage to reduce their "risk" factors by taking away from the product they offer, even after a contract has been validated, signed and paid for! As for fee schedules and medical reimbursements, I feel they should reflect what is reasonable for a given area in the state, based on what carriers in all insurance industries are paying. Why not keep payments for services rendered no matter, workers' compensation, medicaid, health, medicare and liability, all the same. Why would we or should we entertain anything different? In doing so, it appears we get into suspicions of fraud, deception and the likes. Sometimes keeping things simple is the best course of action. I have heard of stories where some doctors are placing some patients above other patients when returning phone calls, making appointments, prescribing medications etc., when the patient is willing to pay the doctor stipends or higher fees. Might this kind of idiosyncrasies be creeping into our medical costs? In the end, I believe Dr. Perlman has his patients best interest in mind over his own agenda, and believe he is well knowledgable in helping us to understand this area of medicine and finance, and what we can do to help reduce costs here as well. Thank you again Charles for being an interested and involved Michigan resident. Denise
Chuck Fellows
Thu, 03/13/2014 - 9:04am
Representative Bolger is using data from the Centers on Disease Control very selectively to support this legislation. The use of this data in this manner is beyond lying, it is malfeasance in office.
Irene Shreeve
Tue, 03/11/2014 - 7:50pm
I am Cliff's mother. The catastrophic victim already has a diminshed quality of life, and you want to diminish it more? Insurance companies should have to live a week in the life of a quad or severely disabled person. You have no idea what is involved. You only see $$$ not going into your profits. I have never questioned paying for the catastrophic fund, because you just never know when it might be YOU or someone you love. To make a person more of a prisoner in their home, is inhuman and some people do NOT live near public transportation. I applaud my daughter in law and all those who fight for the disabled.
Denise Copeland
Thu, 03/13/2014 - 9:44am
Thank you my dear sweet mother-in-law. I wish I could put into words all that is needed to support the severely disabled and that which would motivate our courts, politicians, doctors and citizens to rally around the wonderful life giving benefits that the Michigan No Fault Law offers.
Denise Copeland
Thu, 03/13/2014 - 11:55am
I am disappointed in this article as it lacks the substance to evaluate the need for changes to the Michigan No Fault Laws. Part of the reason for this is because the republican politicians trying to push through reform are not supporting Michigan Voters in revealing the numbers behind such radical changes to the law. Who makes decisions of this magnitude without having legitimate financial numbers, especially when Michigan Families are going to be devastated by the kinds of limits being proposed. If this is not bad enough, we have our Supreme Court Judges making case law judgments to this law, which are having an immediate impact on Michigan's most vulnerable, the severely disabled. Michigan Voters need to be asking themselves, why would they want to reduce their benefits and still pay the same costs? The insurance carriers are already baking into their policies, fees and taxes to cover the losses of the measly savings they dangle as a benefit to reform. Wake up Michigan Insureds ...! Insurance is about "RISK". That means that the carriers and insureds, share in a risk ratio, but it does not mean that the carriers should shoulder little risk with the insureds paying for a greater share of the risk and with less benefits. Again, I ask you, does that make financial intelligent sense? Everyone should be pushing back hard on those who would even attempt such an affront on Michigan Citizens, Michigan Families and Michigan's Most Vulnerable.
Denise Copeland
Thu, 03/13/2014 - 12:13pm
In addition to my above comment, one should think about where all the Catastrophic Claimants are going to fall after the reform. These people and their families are going to bloat and choke the Michigan Medicaid and Food Stamp Programs. As for families that depend on their caregiver benefits to help pay for shelter, gas, electric, insurance, food and the likes, it is my belief that they will be losing their homes as well. I know, I can make this statement because there is no possible way we can keep our home let alone buy a handicap assessable van when no one can work because of the levels of disability, and pay for caregivers! We never thought our lives could change in a matter of seconds, but here we are eighteen years later after a 1996 automobile accident rendering my husband a C5/C6 spinal cord and closed head injury. During these years, with the help of the Catastrophic Fund, we maintained a somewhat quality of life with our family. Our caregiver benefit funds were used for caregivers and for our living expenses, which includes contributing to the financial well being of the State of Michigan, buying clothes, food, insurances, household items, modifications, and the likes. Now you are looking at not only the unemployed pulling Michigan to her knees but all those severely disabled now needing shelter, food, doctors and more, but no where for help but the State of Michigan. Again, does this make financial intelligent sense?