NO-FAULT LEGISLATIVE UPDATE 

No-Fault "reform" efforts continue in the legislature. Essentially, these efforts involve the removal of our unlimited No-Fault benefit system, and replacement with numerous methods of essentially punishing those who would make claims under the law. In return, there are vague and weak promises of short term and small premium reductions. Most recently, the insurance industry and their captive legislators have released a self-serving poll indicating that more than 60% of the people favor reducing premiums even at the expense of some benefits. This kind of polling is dangerously misleading. This is because EVERYONE wants lower premiums; who wouldn't? However, the public does not understand that the reforms that are proposed would not significantly reduce premiums and would significantly reduce access to care following motor vehicle accidents.  This kind of false advocacy requires ever more vigilance on all of our parts to make sure all of our friends and family understand what is at stake here. One argument that bears repeating is that the single most expensive coverage in our auto insurance policies is collision coverage (often by far). This coverage, NOT No-Fault insurance, is what drives high premiums in Michigan. The proposed legislation does NOTHING to address this problem.

AFFORDABLE CARE ACT

One of the most common questions we have heard recently is what effect if any will the advent of  the Affordable Care Act (the "ACA", also known as "Obamacare") have on payment of No-Fault benefits.  Perhaps surprisingly, our early opinion is that the ACA will have little effect on payment of No-Fault benefits. This discussion basically involves the relationships between No-Fault insurers and other potential payors. In a broad sense, most Americans are covered by a combination of Medicare, Medicaid, and other private insurers (often through employment based "ERISA" plans).  The ACA essentially expands this coverage in 2 main ways: a significant expansion of Medicaid eligibility (to bring more low income people in the program); and by the "individual mandate" (requiring the purchase of health insurance coverage by those who can afford to do so). So the ACA does not so much create new insurance programs as it does mandate expansion of existing methods of health care coverage.  The relationships between No-Fault insurance and other sources of health care coverage are fairly well established after 40+ years of practice under the No-Fault Law.  Thus, it is our early expectation that coverage required under the ACA will be made available through the same mechanisms as in the past. As such, it is our early expectation that the well-established rules for coordination of various health care coverages under the No-Fault Act will continue as before. We will of course advise as to case law developments in this and all areas of the No-Fault Law.

As wonderful as the No-Fault Law is, it is administered by No-Fault insurers of different philosophies and capabilities as to claims handling. Our practice is dominated by cases where No-Fault insurers are dreadfully non-compliant with their obligations under the law. Fortunately, there are penalty provisions in the No-Fault Law. These provisions include 12% simple interest for benefits that are overdue, and penalty attorney fees for benefits that are overdue with no reasonable basis. M&T strives to enforce these penalties wherever possible, both to encourage the No-Fault insurers to improve their claims practices, and to compensate our clients for delays in payment. Recently, Wayne Miller was able to impose penalties of $100,000 on top of a $500,000 hospital bill that was paid very late for no reason. Andrew Horne likewise obtained a penalty of $77,000 on top of a $283,000 hospital bill that was delayed for no good reason. Sometimes insurers have reasonable bases for questioning claims. But it is disappointing to see how often insurers will delay for no good reason. When there is no good reason for delay, we pursue penalties.