Bicameral Group of 73 Lawmakers Sign Memo in Support of Bipartisan Amicus Brief Filed by State Reps. Julie Brixie and Andrea Schroeder in No-Fault Lawsuit

Lawmakers explain in the memo they did not intend for the 2019 no-fault law to be retroactive, as it would unconstitutionally deprive survivors of contractual coverage under their auto insurance policies

LANSING, Mich.—(June 9, 2021)—Lawmakers and survivors of catastrophic auto accidents gathered on the steps of the Capitol today to announce that a bicameral group of 73 current and former lawmakers signed a legal memo stating they did not intend for two key provisions in the 2019 no-fault auto insurance law to be applied retroactively.

The memo was included as part of a bipartisan amicus brief filed with the Michigan Court of Appeals by State Rep. Julie Brixie (D-Meridian Township) and State Rep. Andrea Schroeder (R-Independence Township).

In the memo, lawmakers state they did not intend for two key provisions in the 2019 no-fault auto insurance law to be applied retroactively—a fee schedule that slashes insurance company payments to providers of post-acute care by nearly half, and a 56-hour-per-week cap on family and friend-provided, home-based attendant care. Under the law, these two provisions take effect on July 1 and are being challenged in Ellen M. Andary, Philip Krueger, & Eisenhower Center, v. USAA Casualty Insurance Company and Citizens Insurance Company of America.

“Michiganders paid into our no-fault system for years, and even decades, with the understanding that their insurance policy guaranteed their coverage,” said Brixie. “Based on the intent of the 2019 reforms and our state Constitution, survivors who were injured prior to the effective date should be entitled to the full benefits specified in their insurance policy at the time of their accident. The MCCA has a $20 billion balance to provide for their care. To deny coverage for survivors now is unconscionable.”

In the memo, lawmakers also highlighted that the law does not contain any language expressing legislative intent to apply these provisions retroactively. Therefore, the legislators assert these provisions are presumed to have only prospective application.

State Rep. Phil Green (R- Millington) used his time at the microphone to highlight two of many businesses in Tuscola and Huron Counties that serve the beneficiaries of the MCCA insurance plan. Rep. Green stated that both of these small businesses would see the list of services they provide to their clientele drastically change if the provision were applied retroactively.

“I refuse to believe that it was the intent of the legislature to make these changes retroactive,” said Green. “The care Lighthouse Neurological Rehabilitation Center and Season’s Change Home Health provide is essential for survivors who paid their premiums for years with the understanding that their benefits were contractually protected. Now those survivors and families are faced with tremendous uncertainty. The Court needs to act quickly to preserve our provider network in Michigan.”

In the memo, these deeply concerned lawmakers also outline that retroactive application of these provisions in the 2019 law would violate the Contracts Clause of the Michigan Constitution and interfere with private contracts signed by residents of Michigan and their insurance companies.

“Retroactive application of the fee schedule and attendant care cap would be the government breaking the contracts of private citizens in violation of the Contract Clause of the Michigan Constitution and established appellate case law,” said George Sinas, CPAN general counsel and the attorney representing the Eisenhower Center and the Andary and Krueger families in the lawsuit. “People bought their policies years and even decades ago with contractual assurances. Now that care could be ripped away from them. Government can’t infringe on the vested contractual rights of its citizens—that’s something that all legislators, Republicans and Democrats, should be able to agree on.”

Lawmakers also outlined that retroactive application of the fee schedule will force many health care providers out of business, leaving survivors without the care they rely upon every day.

“Re-writing the rules for auto accident victims by arbitrarily capping care is unconscionable and could literally mean the difference between life and death for patients dependent on specialty post-acute services,” said State Sen. Jim Runestad (R-White Lake). “Whether victims are receiving these services in their homes from specialized staff or in dedicated long-term care units, slashing services may result in patient transfers into nursing homes that are not equipped to handle them. Patients and their families are terrified of this uncertainty with this hanging in the balance.”

According to the Michigan Catastrophic Claims Association (MCCA), there are over 18,000 patients who were injured years ago whose care is funded by the MCCA in accordance with their auto insurance policy.

“Traumatic brain and spinal cord injuries are not partisan conditions—they could happen to anyone involved in a severe auto accident,” said State Sen. Winnie Brinks (D-Grand Rapids). “Many of Michigan’s accident survivors have been receiving years of post-acute care for grave injuries. They paid their premiums, including full Personal Injury Protection, under the promise that care would be available for as long as they needed it if the worst happened. Retroactive application would cancel that promise and leave these survivors and families without the care they rely upon every day. This is an urgent situation. These innocent victims need the court’s immediate intervention.”

Despite the insurance industry’s historic profits in 2020, the fee schedule and attendant care cap are set to go into effect in three weeks. Michigan's car insurance rates remain among the highest in the nation and are second only to Louisiana according to a recently released ranking by Insure.com. 

The providers and clinics have already been reporting for months that they plan to close their doors on June 30 as the 45 percent drop in operating income is unsustainable. This will result in thousands of pink slips for frontline workers, and chaos and disruption for thousands of patients and families as they struggle to find providers to provide essential care.

“In my district, home-based care provided by family and friends is a fairly common arrangement,” said State Rep. Helena Scott (D-Detroit). “But home care is a demanding, often 24-hour job and our caregiver families rely on the reimbursements they get from their auto insurance policies to survive. Limiting reimbursement to 56 hours per week will wreak havoc on household budgets and undermine the strength and stability of many caregiver families, and for what? So the insurance industry can gobble up even more profits? This is unconscionable.”  

Lane Bargeron was the victim of a 2012 collision with a semi-truck, leaving him with severe brain injuries that still require rehabilitative treatment. He said changes to the no-fault law are literally a matter of life and death to patients like him.

“Thousands of people like me depend on the ongoing care covered by Michigan’s no-fault auto insurance law,” Bargeron added. “Not to get rich, not to cheat the system, not as an excuse to be lazy and collect checks—but simply to live.”

Other organizations that have filed amicus briefs in support of the plaintiffs include CPAN, Michigan Brain Injury Provider Council and Brain Injury Association of Michigan.