'Very afraid' auto crash survivors fear no-fault overhaul will reduce or wipe out aid
M. Thomas Deller's doctors told his parents several times that he would die after he crossed a street in Livonia to mail a letter and a driver hit him with a Ford Excursion, one of the biggest sport utility vehicles ever made.
But Deller, who was 29 at the time of the 2005 accident, clung to life after he spent 64 days in a coma, emerging with a traumatic brain injury. He has since abandoned the wheelchair doctors predicted he'd live in and graduated from a group home to live on his own with assistance in a Farmington Hills apartment.
Deller attributes his triumphs to physical rehabilitation, social therapy and other services paid for under the state's unique no-fault car insurance law. A state-created fund has paid for unlimited lifetime medical expense coverage for Deller and thousands of other catastrophic car accident victims through a fee every Michigan resident insuring a car has been required to pay since 1978.
But Deller and other critics fear the benefits will be reduced or even disappear after Gov. Gretchen Whitmer signed into law a new no-fault auto insurance plan that trades coverage guarantees for rate reductions. While crash survivors are still entitled to care, the level and quality of their long-term care could change significantly under the new statute that providers contend could drive specialized rehabilitation facilities out of business.
"I'm afraid, I'm very afraid," said Deller, now 43. "I fear not having transportation to go to the grocery store. I fear not having a place to live. I fear having to sponge off of other people. I just don't fear for me; ... I fear for every survivor that is yet to happen."
The reform law is aimed at driving down Michigan car insurance rates that rank among the highest in the nation. Michigan had been the only state requiring motorists to buy car insurance that guarantees lifetime medical coverage.
By July 2020, the new law will give motorists the option to buy less-expensive policies with less personal injury protection.
The law also creates caps limiting the amount medical providers can charge for treating auto crash victims and limits the number of hours insurers are required to pay family members who take care of loved ones. Legal challenges are expected over the law's retroactive application.
"If we don't get a control on it, in terms of health care costs, then costs for our residents are going to continue to go up," said sponsoring Sen. Aric Nesbitt, R-Lawton, who said the law will help curb "price gouging" by medical providers who have benefited from state insurance rules for decades.
While the reform was celebrated by bipartisan leaders as Whitmer signed it at the Mackinac Policy Conference, many crash survivors saw the change as a dark moment.
"I was devastated," said Brian Woodward, a quadriplegic for 35 years after he broke his neck when he was thrown from a truck his friend was driving and lost control of near his hometown near Port Austin.
"I thought it was a very sad day for Michigan," said Woodward, who was 24 at the time of the accident.
Now 60, Woodward is wheelchair-bound, but has enjoyed a full life: He lives in his own home, works full-time at Ford Motor Co., goes hunting and fishing, and attends family events.
He attributes his life to the catastrophic claims fund that provided him with a high-tech wheelchair, an accessible van and 24-hour attendant care that helped him avoid bankruptcy and live in the community instead of a nursing home.
"You want to be accepted as normal," Woodward said. "You don't want to be behind closed doors or hidden away or even trapped in your own home."
Personal injury attorney Steven Gursten, president of Michigan Auto Law, said his phone has “been ringing off the hook” with questions from crash survivors fearful of how the law could affect them.
“People have been receiving family-provided attendant care for 10 or 20 years even, and now they’re being told they may lose that,” Gursten said. “They’re wondering if they’re going to be institutionalized in a Medicaid facility.”
Crash survivors with brain or spinal cord injuries can require around-the-clock care, and Michigan's no-fault auto insurance law had allowed family members to effectively quit their jobs to provide that care. Under the new law, auto insurers will reimburse family members for up to 56 hours weekly and could contract with a private company for any hours above that.
Injury attorneys argue the attendant care cap will apply to existing crash survivors under the law as currently written, but it could be “unconstitutional,” said Gursten, who met with Whiter administration officials last week to urge changes.
“I don’t think they can take away substantive, vested legal rights and take them away retroactively,” he said.
Tricia Kinley, executive director of the Insurance Alliance of Michigan, said the industry group supports the attendant care cap because of "published reports of people abusing the system."
Testifying before lawmakers in March, Michigan Catastrophic Claims Association attorney Joe Erhardt said the mother of one 23-year-old woman with a “moderate traumatic brain injury” was trying to bill $35 an hour to provide around-the-clock, in-home attendant care at a cost of more than $300,000 a year."
Sen. Tom Barrett, R-Potterville, said the reform will give insurers more ability to negotiate attendant care levels and costs, which can range based on patient needs.
"I'm not suggesting this is true for all folks, but there have been people who have exploited the attendant care piece," said Barrett, who sits on the Senate Insurance Committee.
Medical fee caps
Beginning July 2020, motorists with Medicare or private health insurance that covers auto crash injuries will be able to purchase policies without personal injury protection guarantees. Lower-income motorists on Medicaid could purchase auto plans with as little as $50,000 in medical coverage, while other drivers could select plans with $250,000, $500,000 or unlimited benefits.
Health officials predict most motorists will chose the cheapest plan available, but “people don’t understand that $250,000 is just three days in the hospital when you have a catastrophic injury,” said Phil Weaver, CEO of Hope Network, a Christian nonprofit with neuro-rehabilitation campuses in Grand Rapids, Lansing, Kalamazoo and Coldwater. "The average person we see usually has been in the hospital for six weeks plus."
Residents with health insurance who opt out of personal injury protection could face “significant limitations” on health care services beyond hospitalization if they are injured in a car crash, said personal injury attorney Steve Sinas. They will also face higher co-pays and other out-of-pocket expenses that could cripple them financially, he said.
The new law also creates a “fee schedule” for medical providers that will start phasing in in July 2021, capping the amount they can charge auto insurance companies for crash care. Hospitals with large trauma centers will be capped at charging 230% of Medicare rates by July 2023.
The Michigan Health and Hospital Association, which pushed to avoid a more onerous fee schedule, called the legislation Whitmer signed a “vast improvement” over earlier proposals.
But “it’s simply too early to project how a change of this complexity and magnitude will ultimately affect patients and their access to health care services,” said Chris Mitchell, executive vice president of advocacy and public affairs.
For services not covered by Medicare, providers will be limited to charging auto insurers 55% of their book rates, which could effectively wipe out long-term facilities that offer specialized care for spinal cord and brain injuries, Hope Network's Weaver said.
“We can’t hire therapists for that," he said. "We can’t have doctors and occupational therapists, speech therapists and regular physical therapists for that fee. There’s just no way to do it.”
Weaver estimates there are roughly 2,000 survivors in the state who require specialized long-term care and may be forced to move out of residential units.
Erica Coulston, a spinal cord injury survivor who founded the Walk The Line recovery center in Southfield, agrees with Weaver's assessment.
"This is a pay cut," Coulston said. "We offer specialized neurological care. That requires additional staff, that requires additional training, that requires expensive equipment ... As this fee schedule takes into effect and as providers adjust, there are many providers that will go out of business because they simply can't survive."
Crash victims who require in-home services typically need care that can be very personal, including help with basic needs such as bathroom usage.
"Many of us prefer to have family members or people in our lives providing that care," Coulston said, adding that crash victims don't want strangers in their home.
Whitmer toured a Hope Network facility one week before striking a deal with GOP leaders on no-fault auto insurance reforms. At the time, she vowed to veto any plan that allowed full medical coverage opt-out in auto insurance, which the final version includes.
The governor met a 26-year-old woman who was struck by a car while riding her bike home from work. Eight months after the crash, the woman had graduated from a wheelchair to a walker. Therapists helped her retrain her throat to be able to eat solid foods again.
“The individuals that (Whitmer) met with are not going to get services in the future,” Weaver said. “I thought that she recognized that.”
Whitmer contends the law will “lower costs and protect coverage for Michigan drivers.” She defended the law this week but said Democrats “would have written a different solution” if they controlled the Legislature instead of Republicans.
“People will have relief — especially people who struggle the most,” Whitmer said at a Tuesday event. “Medicaid recipients will have a real option to buy a much lower level so that it can be affordable and they cannot drive unlawfully because they cannot afford the insurance."
Republicans who pushed the reforms contend unlimited coverage guarantees and medical charges were the primary drivers of Michigan’s sky-high premiums. The law will require insurers to reduce personal injury protection rates for eight years.
Nesbitt argued the law will “contain costs within the system” and downplayed criticism from medical providers and personal injury attorneys.
“This is the wider challenge (toward combating) the highest auto insurance rates in the nation,” he said. “These kind of scare tactics worked for years to stop reforms, but I think people have rightly gotten fed up with a broken system and demanded change.”