Collision Course Part 2: A Fault of Our Own
All roads lead to Michigan
Days after the historic 1997 Red Wings Stanley Cup win, several team members were in a catastrophic limo accident. Among them was legendary defenseman, Vladimir Konstantinov, lovingly known by fans as the “Vladinator.”
Vladimir Konstantinov had a traumatic brain injury. At first, doctors said they didn't know if he would make it. If he did, they said he would never walk or talk again.
Against the odds, Konstantinov’s brain began to heal. It took a lot of the right medical care and therapies.
Irina Konstantinov, Vladimir Konstantinov’s wife, tried moving her husband to other states for care, but nothing compared to the comprehensive care in Michigan.
“It wasn't good enough,” Irina Konstantinov reflected. “And I kept going back to the fact that everybody [was] saying that we got to go back to Michigan for the best care for him.”
For more than two decades, Vladimir Konstantinov has been living a good life in his own home in Southeast Michigan. He has 24/7 homecare, regular therapies, and medical care from brain trauma specialists – all of which is paid for by Michigan’s system for catastrophically injured collision survivors.
Recent reforms to Michigan’s auto insurance laws have put the future of that system of care in doubt, however. So Konstantinov’s family and his caregivers are now living a week-to-week existence, not knowing how much longer they can provide have the care he needs. And they aren’t the only ones. There are thousands of other people in Michigan at risk of losing their life-saving care.
The beginnings of auto no-fault
By the 1970s, the automobile was a big part of American culture. And more people on the road meant more accidents. In fact, US Department of Health and Human Services reported that in the decades between 1950 and 2018, the 1970s saw the most deaths by motor vehicle-related injuries.
While many people did have car insurance, not all crash survivors were getting the medical treatment they needed. George Sinas, general counsel for the Coalition Protecting Auto No-Fault, said this was because of a pure tort liability system that was slow and expensive.
“[T]he victim of a motor vehicle or injury could only recover medical expenses and damages for pain and suffering and diminished quality of life if the other guy was at fault,” Sinas said.
But even if there was someone at fault, drivers could still end up waiting a while to get their care covered.
“Because it was a liability system, that meant it was adversarial and that meant typically that you needed a lawyer and you had to go through this adversarial liability system that took a long time. It was expensive,” Sinas said.
In the early 1970s a national conversation picked up in many states and in Congress about a new, no-fault system of auto insurance. The Michigan Legislature adopted our state’s no-fault statute in 1972. Republican Governor Bill Milliken, a driving force behind the measure, signed it into law.
Michigan wasn’t the only state to implement some sort of no-fault law. However, it was the only one to guarantee car crash survivors lifetime uncapped medical and rehabilitation coverage.
The state set up a separate way to pay for the most catastrophic, most expensive injuries. Every driver paid a little extra on their insurance policies to fund that system, called the Michigan Catastrophic Claims Association.
“[T]hat meant for all those years that the catastrophically injured victim was assured that whatever medical and rehabilitation expenses were reasonably necessary would be provided to enhance the quality of life and the recovery of those victims,” Sinas said.
No-fault: A political battleground
After auto no-fault insurance requirements were signed into law, the political pushback began. It ramped up after voters approved legislator term limits in 1992. Those limits gave insurance lobbyists another bite at the apple to influence a fresh batch of lawmakers every few years.
On one side, insurance companies said that they were being charged more than the actual cost of patient care. On the other, patient advocates and trial lawyers said that insurance companies didn’t want to pay the actual cost of long-term care. A political battlefield emerged. Term after term, attempts to change auto no-fault law would be introduced at the Capitol, each ultimately to fail.
For years, a coalition kept Michigan’s system of no-fault auto insurance coverage intact. They were the victims of catastrophic car injuries and their families, along with medical professionals, disability rights advocates, and lawyers who represented crash survivors. And they faced stiff opposition.
“[T]here was a coalition of groups that both believed in the previous system as an important safeguard for people who suffered catastrophic injury, but also a coalition of groups that benefited from the previous system,” said Zach Gorchow, editor and publisher of Gongwer New Service. “They were being paid for the operations and services they were performing.”
The two sides — insurance companies and crash survivor advocates — returned often to Lansing, and the political battle continued. The rest of Michigan’s drivers were stuck in the crossfire, paying insurance rates much higher than most states.
This was especially true for Detroiters, who have had higher insurance premiums than the rest of the state on average, and in some cases the highest premiums in the entire country. The poverty rate is also high in Detroit, which meant that some people couldn’t afford auto insurance at all.
The downfall of no-fault
Several important changes broke the dam of auto no-fault reform.
First, in 2014, Mike Duggan was elected mayor of Detroit. A former hospital CEO, he made reforming auto no-fault a top priority.
“He started working legislative democratic primary elections to get allies of his on this issue elected and was successful in many ways in that,” Gorchow said. “So you had him become a vocal advocate on the democratic side for this.”
Next, Oakland County executive L. Brooks Patterson got sick. He was a powerful Republican and a staunch proponent of auto no-fault for many years, especially after getting into a life-altering car crash. But after he was diagnosed with terminal cancer and announced he wasn’t running for office again, his influence evaporated.
Then, in 2018, voters elected Gretchen Whitmer, who campaigned on reducing auto insurance costs.
Finally, Detroit businessman Dan Gilbert, the wealthiest man in the state, made auto no-fault his issue as well. He said he would finance a ballot initiative to overhaul Michigan’s auto insurance laws. If a ballot drive succeeded, the question would either be put to voters or be taken up and passed into law by the state Legislature. That tactic would have called for a veto-proof measure and would have left Governor Whitmer out of the field of influence. Zach Gorchow says it would have been an insurance industry “dream bill.”
All these forces opened the gates for auto no-fault reform advocates to finally change insurance law.
Leaders in the Republican-led Legislature worked with auto insurance lobbyists to draft a reform bill.
CPAN, the Coalition Protecting Auto No-Fault, said they were shut out of the process. Survivors and health care providers didn't have a seat at the reform table.
In late May of 2019, the state Senate voted on no-fault reforms in a late night session. Most of the Democrats joined with the Republicans to pass the bill, and then it was sent to the state House.
With the strike of a gavel, the 1972 law auto no-fault law came crashing down. Governor Whitmer signed the bill on May 30.
Today I signed Senate Bill 1 to reform Michigan’s auto no-fault insurance system. This legislation is a clear step forward and will provide relief for every Michigan driver. When we work together, we get it done. #MPC19 pic.twitter.com/uSZ2RDKdSw— Governor Gretchen Whitmer (@GovWhitmer) May 30, 2019
A new no-fault
There are two main components of the new bill. First, drivers can choose a lesser amount of personal injury protection. Second, insurance companies are legally permitted to cut payments to long-term care providers – the folks who care for catastrophically injured crash survivors – by 45%. That’s far below the actual cost of providing care for most accident victims.
“We're at $150,000 in the hole right now with [Vladimir Konstantinov's] care alone and about $1.7 million with all of the catastrophic auto cases that we have throughout the state, which is approximately 30 clients.”Theresa Ruedisueli, Arcadia Homecare & Staffing
The state Department of Insurance and Financial Services determined that the new law is retroactive; it applies to everyone, no matter when an accident occurred. There is a class action lawsuit challenging that notion, but it could take a long time to get to the state Supreme Court.
This brings us back to Vladamir Konstantinov. Currently, he is facing the total loss of his care – just like thousands of other folks with catastrophic injuries. The fee cuts in the new bill are driving long-term care companies across the state out of business.
Though they haven’t yet closed up shop in Michigan, Arcadia Home Care & Staffing is supporting Konstantinov at a financial loss, said Theresa Ruedisueli, the company's Regional Director of Operations for Michigan and Ohio.
“We're at $150,000 in the hole right now with his care alone and about $1.7 million with all of the catastrophic auto cases that we have throughout the state, which is approximately 30 clients.”
Ruedisuili says Arcadia can’t sustain those losses much longer.
"It’s time to move on"
So how did the bill pass with all of these glaring consequences? Many lawmakers say they didn’t know what was in the bill, and they weren’t given enough time to figure out what it would actually do. Specifically, they did not understand that the cuts to payments for care might be retroactive. Legislators with qualms were also assured that problems with the new law would be fixed later. But that has not happened.
Since summer 2021, auto accident victims, family members, and advocates have continued to go to the state Capitol to ask lawmakers to reconsider the no-fault reforms.
In March 2022, they tried to talk to State House Speaker Jason Wentworth.
He didn’t meet with them, and later told reporters “at this point, it’s time to move on.”
Speaker Wentworth declined to comment for this story.
“How can you move on when you can’t move, huh?,” said catastrophic injury survivor Sam Howell in response to Wentworth’s comments.
“I can't tell my son or other people within this catastrophic fund to move on,” said Sam’s dad, former state lawmaker Jim Howell. “We can't. We're stuck.”
Sam Howell suffered a traumatic brain injury from an accident when he was 18 years old. Since then, his mother, father, and sisters have cared for him. They have a plan for Howell’s long term care, but other families do not. So the Howells spend a lot of their time and energy advocating for victims and families who don’t have a clear path forward anymore.
“We've already lost seven people,” said Sam Howell’s mother, Maureen Howell. “They've died as a direct result of the change. And I know how people have left their homes. Some have gone into hospitals to live. We talk about depression during the pandemic. These families are so, so depressed, so stressed, and they're frazzled financially. They're, they're dying.”
As far as the Legislature is concerned, there is no more work being done to amend changes to auto no-fault. But the families and care teams said they will keep fighting for their loved ones and for other families that can’t make the trip to Lansing.
The current debate may be over in Lansing. But car accidents are still happening, which means every year many more people will need long-term, life-saving care.
Just like the care that’s kept Vladimir Konstantinov living at home in Michigan.
The problem is, there are far fewer resources available for any car accident victims – current or future. Vladdy included.
In the third and final chapter of Collision Course, we will look at what it actually means to lose care for car crash survivors. And what auto no-fault reform means for every Michigander.
The Insurance Alliance of Michigan declined to be a part of this story. IAM executive director Erin McDonough instead issued the following statement, similar to previous statements issued to Michigan Radio from IAM:
“Michigan Radio’s one-sided and slanted reporting on the state’s auto no-fault reforms does a true disservice to its listeners. For decades, Michigan’s broken auto no-fault system saddled Michigan drivers with the highest auto insurance rates in the nation. Michigan was the only state in the nation to require that drivers purchase unlimited, lifetime medical benefits with their auto insurance policy which was the main culprit in the state’s exorbitant auto insurance premiums. The outdated system was a welcome mat for fraud and rampant overcharging by big hospitals and medical providers, who routinely charged three and four times more to no-fault policies than they did for the exact same medical procedure paid by other types of insurance policies. Finally, in 2019, a bipartisan group of lawmakers passed and the governor signed into law historic reforms that gave Michigan drivers a choice in their level of medical coverage – much like a cellphone plan or cable TV subscription – so consumers could have the flexibility to choose what works best for them and what they can afford. More than 7 million insured Michigan drivers are now receiving the biggest refund in history – $400 per-vehicle – through May 9. That’s $3 billion in savings going back into the pocketbooks of insured drivers across the state. These savings are in addition to the over $1 billion already saved by Michigan drivers through lower MCCA assessments since reforms took effect along with reductions in the carrier rate filings. The 2019 bipartisan auto no-fault reforms are also reducing fraud and reining in rampant overcharging by medical providers for the first time which is driving the costs down for consumers at a time when the cost of everything from gas to groceries is going up.”