Michigan’s policyholders faced numerous changes to their auto insurance following the reforms that went into effect last July. However, there are additional reforms that went into effect on July 1, 2021, which will have a far-reaching impact on both policyholders and no-fault medical providers.
If you were injured in a car crash and sustained serious injuries, our experienced car crash lawyers in Grand Rapids are prepared to help. Call us for a free consultation to get answers to your legal questions, including how Michigan’s latest auto insurance reforms may impact your no-fault benefits.
Michigan’s Auto Insurance Reforms – Earlier Changes
Of all the earlier changes to Michigan auto insurance laws, the most significant to policyholders included the ability to reject unlimited lifetime Personal Injury Protection (PIP) coverage. This modification enables Michigan drivers the ability to choose from different levels of PIP coverage according to their needs and budget, including:
- Continuing unlimited PIP coverage
- Coverage limits up to $500,000
- Coverage limits up to $250,000
- Coverage limits up to $250,000 (only if the insured has another qualifying health insurance policy)
- Coverage limits up to $50,000 (only an option if the insured has Medicaid and other qualifying insurance)
It can be difficult for policyholders to try to determine what level of PIP coverage might be needed if an accident occurs. However, if an insured does not choose a PIP option, unlimited PIP coverage is automatically selected by default.
What Are the Latest Changes to Michigan’s Auto Reform Law?
This third phase of Michigan no-fault auto insurance reforms are significant and include:
Home Health Care Coverage Caps
Under the state’s previous auto insurance laws, victims who had sustained a catastrophic injury could obtain 24-hour, around-the-clock home health care coverage. Caregivers could be a relative, friend or even a business associate – it could even be another person residing with the injured party.
The benefits of this coverage for injured victims were:
- Receiving home health care from someone familiar to the injured party
- The ability to pay the caregiver at a fair market rate, even though it was a friend or family member
- Obtaining home health care for much less than it would cost to hire someone from a commercial agency
Under the new home health care laws, however, an injured person can only obtain caregiver coverage from a friend, family member or business associate for a maximum of 56 hours per week. This law will significantly impact catastrophically injured victims who need assistance and care around-the-clock.
It is important to note that the 56-hour maximum coverage limit does not apply if home health care is provided by commercial agencies. This means that accident victims who need care beyond the 56-hour limit may still get it from a commercial agency, but at an increased cost.
No-Fault Medical Providers Must Follow the New Medicare-Based Fee Schedule
Of all the changes to Michigan’s auto no-fault reform laws, this third phase will have the most significant impact. The Governor, along with state legislators, requires all hospitals, physicians, clinics and other medical providers to adhere to the newly created Medicare fee schedule. This schedule of fee caps drastically limits what no-fault providers can be paid for the services they provide to patients injured in a car crash. In fact, these providers will be forced to reduce their fees by 45 percent.
How Will These Latest Changes Impact Future Injury Claims?
For starters, not only are these changes effective from July 1, 2021 and going forward, state legislators also want to retroactively apply them. If this happens, victims may have a harder time finding medical clinics, doctors or other staff to provide the level of care they need – especially those with extensive, life-altering injuries. The medical facilities that provide this care may have to shut their doors.
In short, no-fault providers and injured victims may be impacted in the following ways:
For Providers
- The new fee caps will severely cut revenue by 45 percent
- Many small to mid-size businesses will likely be unable to survive these cuts to their revenue
- If many of these smaller businesses fail, injured patients may have difficulty finding a provider
For the Injured
- Doing without the 24-hour care they need
- Paying more to get professional caregivers for care exceeding the 56-hour per week limit
- Being forced to negotiate with the insurance company to continue receiving coverage for 24-hour care
- Potentially having to travel further if local, smaller to mid-size no-fault providers have to close
Need Help With a Crash Claim? Get Answers to Your Legal Questions for Free
If you were injured in a car crash and sustained serious injuries, we are ready to help. Learn if you may have a valid claim and get answers to your legal questions, including how we may be able to help if the latest auto reform insurance laws impact your injury claim.
Call Jay Trucks anytime, day or night, to schedule your free case review. There is no obligation to hire our services after this meeting. If we represent you, there are no costs or fees for you to pay up front or while we work on your case.
