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MI Supreme Court: Insurers must continue payments to catastrophically injured car crash survivors

Catastrophically injured car accident survivors gather at the State Capitol on January 13, 2022
Tracy Samilton / Michigan Radio
Catastrophically injured car accident survivors gather at the State Capitol on January 13, 2022

The Michigan Supreme Court will decide whether changes made to the state’s auto insurance law in 2019 are constitutional. But, in an order issued Thursday, the court said insurance companies must continue paying the pre-2019 benefit levels until the case is decided.

The law rolled back reimbursements for at-home attendant care and rehabilitation clinics. Providers say those cuts were putting them out of business and leaving patients without the care they need.

The constitutional question is whether insurers can reduce those payments after people paid for coverage.

Attorney Mark Granzato said the 2019 law violates the contracts clause of the Michigan Constitution.

“The contracts clause says, basically, a vested right that exists in contract can’t be altered by legislative action, and that was our major constitutional claim in this case,” he told Michigan Public Radio.

“This is not an ordinary case,” he said. “This is an incredibly important legal issue that effects thousands and thousands of people in Michigan.”

The Michigan Court of Appeals ruled last month that the payment reductions can’t be imposed retroactively to people injured before the 2019 law was enacted without violating the state constitution.

Despite the ruling, many car crash survivors who've lost care may have to wait longer to potentially get it back.

Some providers already went out of business. Others said they'll wait for a final Supreme Court decision before deciding what to do.

Bob Mlynarek said he won't wait. Mlynarek is co-owner of First Call Home Health Care. In May, his company had to let its 45 car-crash patients go elsewhere for care — many to hospitals. But he said the Supreme Court order is clear — for now, crash survivors are entitled to necessary care at reasonable rates.

"So that is the law of the land, we're bringing our patients back on board," he said. "It's gonna take a little time but we think in a few months we'll have all of our 45 patients back."

The Michigan Department of Insurance and Financial Services said it's reviewing the order but "at the end of the day," its job is to implement state law.

Erin McDonough of the Insurance Alliance of Michigan said the Supreme Court order will damage efforts to bring down the high cost of auto insurance.

“Both before and after the 2019 reforms, insurers have remained liable to pay reasonable and medically necessary care for this injured in auto accidents in Michigan,” McDonough said. “The issue is not about access to care, but about medical providers demanding an unchecked level of compensation.”

The law was challenged by families, home health care providers, and brain injury clinics. The state Supreme Court scheduled oral arguments to be heard in March of next year.

Tracy Samilton covers energy and transportation, including the auto industry and the business response to climate change for Michigan Radio. She began her career at Michigan Radio as an intern, where she was promptly “bitten by the radio bug,” and never recovered.