No-fault auto insurance has arrived in Southwest Michigan – InsuranceNewsNet

St. JOSEPHMichigan No-fault auto insurance reform is working great for auto insurance companies, but not for those catastrophically injured in car accidents, said Sarah Raineregistered nurse manager for Private medical care at home with Saint Joseph.

Rhyne spoke during a public discussion held at her office on Thursday about how the first year of the auto reform has gone.

“It works really well for (the auto insurance industry) because they save a ton of money,” said Sarah Raineregistered nurse manager for Private medical care at home with Saint Joseph.

The law was passed in 2019, but she said the part that harms catastrophic people didn’t kick in until July 1, 2021. That’s when auto insurance companies had to begin reimbursing providers 55 percent of what they paid in 2019 for services not covered by Medicare, which includes most home health services. This fell to 54 percent in July, before falling to 52.5 percent July 1, 2023.

Rein said no one can afford to continue working at 55 percent of what they were paid in 2019.

“We have the option of leaving a vulnerable person with a disability who, in some cases, could die if we release them, or we can provide services at a loss indefinitely, which is not possible,” Raine said.

She said benefits for all people who suffered catastrophic injuries were cut because no one was “grandfathered.”

Teresa Ruedisueliregional director of the company Arcadia Home Care, which includes an office in the village of Benton Harborsaid her company was caring for 30 car accident patients when the change began.

“Now we have about 15 that we can continue to care for,” she said, adding that she’s not sure how long those 15 will be able to pay for 45 percent of their care out of pocket.

Ruedisweli said her company has 2 million dollars in unpaid bills due to reductions in payments made by auto insurance companies.

“It’s not sustainable,” she said. “It is not possible to continue to extend this level of coverage without a solution in mind.”

In addition, Rhyne said at least five people have died in the state after losing home health care because of the law changes.

Before the law was changed, drivers were required to have unlimited personal injury protection (PIP), ie Michigan drivers had some of the most expensive auto insurance in the country.

Rhyne said the state’s auto insurance rates are still among the highest.

“You should be concerned because you’re paying close to what you (paid) before the reform for dramatically reduced coverage,” she said.

Raine said 18,000 people in the state have suffered catastrophic injuries from car accidents. An additional 1,000 people are expected to be injured each year.

In 1978 Michigan Legislature created Michigan Catastrophic Loss Association (MCCA), a private, non-profit organization that determines how much PIP benefits will cost per vehicle provided to drivers through their auto insurance companies.

Rein said the MCCA has 23 billion dollars in surplus PIP money that could be used to continue helping people who have suffered catastrophic injuries.

She said it was private money that people paid to their auto insurance companies, not tax money. Before the new law, she said, insurance companies told the MCCA how much coverage an injured person needed.

“Now the MCCA can say to your insurance company, ‘We’re not going to reimburse you if you pay for this treatment,'” Raine said. “You have a contract with an insurance company. You don’t have a contract with the MCCA, but they decide what you can get.’

Ruedisweli said that when she tells people about the changes and the devastating effects they have on people who are catastrophically injured, they are overwhelmed and want to know how they can help.

People can find more information on the We Can’t Wait Facebook page, she said.

Rhyne said she was disappointed that no local elected officials showed up for Thursday’s community hearing. She said she was told they would be available after the August primary election, which was held last week.

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