DETROIT (AP/WOOD) — Major changes in Michigan’s car insurance system don’t apply to people who were catastrophically injured before a 2019 law kicked in, the state Supreme Court said Monday in a decision that delivers critical relief to thousands of people counting on long-term benefits.
But the 5-2 opinion didn’t come soon enough for Brian Woodward, who was paralyzed in the 1980s and had frequently talked about the law’s drastic impact on his care. He died Monday at age 64, his family said.
For decades, crash survivors were entitled to lifetime payment for “all reasonable charges” related to care and rehabilitation. But a new state law set a fee schedule and a cap on reimbursements. Suddenly, 18,000 people already receiving benefits were forced to scramble as some care providers dropped out.
“They did that with a good faith understanding that these benefits and the services that they have through their policies are going to be there,” said Tim Hoste, president of CPAN, a coalition of medical organizations and consumer groups. “And all of a sudden, in the middle of the game, the rules change, and they found themselves with no options.”
The Supreme Court, however, said a “vested contractual right” to ongoing benefits “cannot be stripped away or diminished,” especially when lawmakers failed to declare an intent to do so when they changed the law.
“We had 72 legislators who were serving at the time when this law passed that signed a brief in court (that) stated, ‘We had no intention for this to go retroactive,'” added Hoste. “This is an enormous victory for the rights of crash survivors, and we want to thank all the advocates who fought along with us to make this day a reality.”
The decision was written by Justice Elizabeth Welch, a Democrat, and joined by other Democratic justices and by Chief Justice Elizabeth Clement, a Republican.
In an effort to lower Michigan’s insurance rates, which were among the highest in the U.S., the Republican-controlled Legislature and Democratic Gov. Gretchen Whitmer agreed to sweeping changes in 2019. Drivers can save money by choosing certain injury-coverage options. But payments for certain care were also slashed.
Barry Cargill, CEO of the Michigan Homecare and Hospice Association, said reducing the reimbursement to “an unachievable level” eliminated the ability to access medically necessary homecare services.
The catastrophically injured include hockey star Vladimir Konstantinov, a former member of the Detroit Red Wings, who requires 24/7 care. He suffered severe brain damage in 1997 when a drunken limousine driver crashed the car he was traveling in, following the team’s NHL championship.
Konstantinov had an outstanding balance of $250,000 for home care at one point due to the change in law, said Theresa Ruedisueli of Arcadia Home Care & Staffing, which continues to provide care.
“He can’t eat, he can’t cook, he can’t drive,” Ruedisueli said. “All of the things that you and I take for granted, just getting ready for work in the morning, he can’t do without help.”
Woodward suffered devastating spinal injuries in a crash but was able to get in-home care and even hold a job through insurance. When the law changed, and care rates were reduced, he said he lost caregivers and was shuttled from facility to facility.
“I’m dying,” Woodward told The Detroit News last week. “My body is breaking down because I’m not getting enough exercise.”
Hoste said the law led to the “spiritual, emotional and physical decline of many people, including Brian.”
An industry trade group, the Insurance Alliance of Michigan, said the Supreme Court decision will open the door to overcharging for medical care. The lower reimbursement schedule, however, remains intact for injuries since the law was overhauled.
“The court let down consumers across Michigan and opened the floodgates for overcharging for medical procedures and higher rates,” said executive director Erin McDonough. “You can’t reasonably expect to save Michigan drivers money while obliterating a key cost control measure like the fee schedule.”
In a dissent, Justice David Viviano said the Supreme Court majority crafted an opinion based on “vague and disputed concepts” to provide cover for those who simply believe it would be unfair to reduce future benefits for the long-term injured.
“As a result, the efforts of the Legislature and the governor to reduce costs and make insurance more affordable for all the residents of our state will not come to fruition for many decades,” said Viviano, who was joined by fellow Republican Justice Brian Zahra.
“If courts cannot be trusted to faithfully interpret and apply the laws, especially those involving such significant and contested topics, then the democratic process is in peril,” Viviano said.
Associated Press reporter Mike Householder contributed to this story.