Opinion ID: 2228748
Heading Depth: 1
Heading Rank: 2

Heading: Premium Cost Reduction

Text: Similarly, pursuant to the classifications drawn by the Legislature in enacting  3109(1), all Michigan motorists pay the same uniform premium rate for no-fault coverage but all do not receive the same benefits. It is urged by defendant that such classifications are permissible means for achieving the lowering of premium rates. We do not agree as  3109(1) focuses the burden of premium cost reduction on governmental benefit recipients alone. That class is confronted with a set-off while similarly situated private insureds who benefit from this premium reduction are not. This conclusion obtains whether we review  3109(1) alone or in conjunction with  3109a. Section 3109a, MCL 500.3109a; MSA 24.13109(1), provides in relevant part: An insurer providing personal protection insurance benefits shall offer, at appropriately reduced premium rates, deductibles and exclusions reasonably related to other health and accident coverage on the insured.    The effect of this section is to permit a no-fault insured who has engaged collateral, private insurance to receive a reduction in premium rates if that insured has elected a set-off of private, collateral benefit amounts. Section 3109(1), on the other hand, compels an insured to pay the full premium rate while concurrently requiring acquiescence to a mandatory set-off of governmental benefits for which the insured has paid. In a real sense, both classes of insureds have paid for their collateral benefits whatever form those benefits have assumed. Yet, those who have engaged private, collateral benefits are permitted to recoup some of their collateral benefit costs through an appropriate premium reduction pursuant to  3109a while those who receive governmental benefits are denied a similar recoupment of some of their out-of-pocket collateral benefit costs through an equally appropriate premium reduction. In effect, private collateral benefit no-fault insureds are disproportionately permitted larger no-fault benefits for their elected full or reduced premium rate payment than are similarly situated governmental benefit recipient-insureds at the mandatory full premium rate. [23] Further, proceeding from an analysis of  3109(1) alone, we are similarly convinced that the burden of effectuating the permissible premium cost reduction objective unconstitutionally rests solely upon the governmental benefit class of no-fault insureds. Unlike the collateral private insured class, the governmental recipient insured class is first compelled to purchase no-fault insurance, denied full no-fault coverage on claims compensable by governmental programs ostensibly for the purpose of reducing premiums, and is then denied the full benefit of the savings in premiums while the similarly situated private benefit class is not. In essence, this scheme operates both arbitrarily and discriminately to compel those insureds entitled to both government and no-fault benefits to subsidize premium savings for the greater class of all insureds including those entitled to receive and hold private insurance benefits. [24]