Court Opinion

ID: 9701470
Source: CourtListenerOpinion
Date Created: 2023-08-25 22:20:29.043137+00
Date Added: 2024-06-11T15:05:10.482088
License: Public Domain

Levin, J.
(concurring in part; dissenting in part). The question in this case is whether, when an insured has overlapping Medicare and no-fault automobile liability insurance coverage, the no-fault insurer must pay benefits that duplicate benefits paid by Medicare. The Court’s decision that duplicative payments must be made answers the question in a manner that fails to implement the Legislature’s efforts to reduce the costs of no-fault insurance to Michigan consumers by eliminating duplication.
Section 3109(1) of the no-fault automobile liability act1 provides that no-fault benefits otherwise payable are to be reduced by benefits provided under state or federal law. Medicare benefits are provided under the federal Social Security Act, and thus, contrary to the decision of the Court, are to be subtracted from no-fault benefits otherwise payable. The basic goal of § 3109(1) is to reduce the cost of no-fault insurance by eliminating the requirement to pay benefits which duplicate benefits already received from the government; the Legislature anticipated that by reducing the benefits that *208had to be paid by no-fault insurers, it would reduce the premiums no-fault insurers had to collect.
Section 3109a, an amendment enacted two years after the no-fault act,2 carries this effort a step further. It requires no-fault insurers to offer policies whose coverage is coordinated with the insured’s other insurance coverage, and to reduce premiums commensurate with the reduced coverage. In other words, no-fault coverage can thereby be reduced to the extent the insured is already covered under another policy, so the insured is not required to double-insure.
Thus, both §§ 3109(1) and 3109a attempt to coordinate benefits, § 3109(1) mandatorily and § 3109a at the option of the insured. Both sections have the same purpose, to reduce the cost of no-fault insurance by removing the obligation to pay benefits which merely duplicate benefits received for the same loss from another source.
Despite the similarity of approach and purpose, which would seem to indicate that § 3109a was intended to continue and expand the policy of § 3109(1) rather than to preempt it, the Court concludes that § 3109a has by implication partially repealed § 3109(1). The Court reasons that because Medicare is insurance coverage whose coordination with no-fault coverage is at the option of the insured under § 3109a, its benefits cannot be subject to the mandatory coordination required by § 3109(1).
We do not know why the Legislature made coordination under § 3109a optional. Unlike the majority, however, I am not persuaded that part of the purpose for doing so was to repeal by implication the mandatory coordination of duplicative governmental benefits required by § 3109(1). Such *209a construction stands the basic purpose of § 3109a on its head. Instead of helping to further eliminate duplication, § 3109a thereby works to allow duplication heretofore eliminated under § 3109(1).
It is not necessary to construe §§ 3109a and 3109(1) as mutually exclusive; both can be given full operative effect. Medicare payments, as a governmental benefit under § 3109(1), are to be subtracted from no-fault benefits otherwise payable. And no-fault insurers, under § 3109a, must offer, at appropriately reduced premiums, deductibles and exclusions reasonably related to the insured’s Medicare coverage.3
Since the two provisions are not necessarily inconsistent, and since giving full effect to each furthers their basic purpose of eliminating duplication, the sections should be so construed. This construction coincides with that of the Commissioner of Insurance, whose agency has the respon*210sibility of administering the act, as revealed by the bulletin issued upon passage of § 3109a in which the commissioner explained procedures for complying with § 3109a.
It may be considered inequitable to allow a no-fault insurer the windfall of collecting premiums to cover losses that will actually be reimbursed by Medicare. Courts, however, must resist construing statutes of such broad remedial intent as the no-fault act solely to reach an equitable result in the case at hand. Individual equity may be at the expense of the society-wide equity of the act as a whole, as conceived by the Legislature. Such may be the result here. Although the Court’s construction disallows a windfall to no-fault insurers, the overall cost of no-fault insurance will rise because no-fault benefits payable will be reduced under § 3109(1) only by those governmental benefits which cannot be characterized as resulting from "coverage” under § 3109a.
The failure of insureds to accept the required offerings of reduced coverage, at a reduced premium, to reflect losses that will be reimbursed by Medicare, is more likely the result of the failure of the insurance agent to offer and explain such coordination than the result of an informed choice to double-insure. Few people are willing to pay for redundant coverage of medical expenses.
If more is needed to enforce § 3109a’s requirement to offer coordinated coverage, the Legislature or the Commissioner of Insurance may provide it. Moreover, while the construction by the Court removes the no-fault insurer’s windfall, it provides no actual encouragement for a no-fault insurer to offer coordinated coverage under § 3109a. As long as the premiums being collected yield a profit beyond what must be paid out in benefits, no-fault *211insurers can be expected to continue to sell the full coverage regardless of the fact that the benefits paid out duplicate those of Medicare.
I
Section 3109(1) was part of the act as originally-enacted. Section 3109a was added two years later. When construing amendments, "regard must be had for the law as it was, for the effect and purpose of the amendments changing it, and all provisions must be given effect and reconciled with each other if possible. Amendments dominate and modify the former law, in case of conflict”.4
A
Thus the first step in the analysis — one omitted in the opinion of the Court — is to determine whether Medicare was a government benefit requiring setoff under § 3109(1) before the addition of § 3109a.
Section 3109(1) is based on two model acts— UMVARA5 and MVBPIA6 — both of which require the setoff of Medicare benefits.
MVBPIA requires the setoff of all benefits received from sources other than no-fault and "added protection” insurance in determining net loss. "Added protection” is defined as "insurance, optional to the insured, providing benefits beyond *212basic * * * [no-fault] insurance on terms and conditions consistent with the provisions of * * * [the particular no-fault plan]”. MVBPIA thus makes all collateral benefits, regardless of their source, primary unless the benefit reimburses loss not covered under no-fault insurance.
UMVARA requires the setoff of only "social security, workmen’s compensation, and any state-required temporary nonoccupational disability insurance”. Thus, under UMVARA, the source of the benefit was used to distinguish which benefits were to be set off.
The Michigan act, by distinguishing benefits required to be set off by their source, is similar to UMVARA. Rather than provide a particularized list, however, the Michigan act generalizes, speaking of benefits provided or required to be provided under state or federal law.
This Court found workers’ compensation to be a benefit within the intendment of the Michigan act’s general language in Mathis v Interstate Motor Freight System.7 In O’Donnell v State Farm Mutual Automobile Ins Co,8 we reached the same conclusion as to survivors’ benefits under Social Security.
Medicare is a Social Security benefit.9 The commentary to UMVARA makes it clear that even under its more restrictive language, Medicare was within the benefits intended to be set off: " 'Social Security’ includes all benefits under the federal Social Security Act, including Medicare and disability benefits.”10_
*213There is no reason to suppose that the Michigan Legislature, in enacting a collateral benefits provision modeled primarily on UMVARA, intended by its more general language to exclude Medicare from the required setoff. If anything, the Legislature intended to require setoff of a broader array of benefits than those specified in UMVARA.
I would consider it therefore clear that Medicare benefits are required by § 3109(1) to be set off, unless § 3109(1) was changed by the later addition of § 3109a.
B
I concur in the Court’s conclusion that Medicare is "health and accident coverage” within the meaning of § 3109a, and hence that no-fault insurers are required to offer, at appropriately reduced premium rates, deductibles and exclusions to reflect an insured’s Medicare coverage. I do not agree, however, that simply because Medicare is coverage within the meaning of § 3109a, its benefits must necessarily be excepted from the mandatory setoff required.by § 3109(1).
We should give full effect to both provisions unless some part of § 3109(1) is necessarily inconsistent with § 3109a. The two sections are not mutually exclusive. Governmental benefits required to be set off under § 3109(1) may still be benefits paid pursuant to health and accident coverage for which the insurer must, under § 3109a, offer premium rates reflecting deductibles and exclusions.
The purposes of § 3109a are to facilitate the coordination of no-fault coverage with other coverage on the insured, and to require that the savings derived be passed on to the insured in the form of *214lower premiums. The problem addressed by § 3109a was that health and accident policies and no-fault auto policies both provided coverage for the same medical expenses and wage loss. Duplicative premiums were being collected to insure against the same risk, and duplicative benefits were being paid to reimburse the same elements of loss. Section 3109a was added to promote the elimination of such duplication.
One way to eliminate the duplication would have been to make coordination of coverage mandatory under § 3109a. No-fault insurers could have been required to limit their coverage, and premiums, to losses not already covered by the insured’s general health and accident insurance, or vice versa. The Legislature, however, chose to make coordination optional, requiring only that no-fault insurers offer coverage with deductibles and exclusions to reflect other coverage.
The opinion of the Court concludes that coordination under § 3109a was not made mandatory because the Legislature wished to provide insureds with the option of obtaining additional insurance coverage. It is one thing to recognize that not making coordination under § 3109a mandatory will allow the purchase of additional insurance. It is quite another to conclude that part of the Legislature’s purpose was to confer the option of duplicative coverage, as distinguished from coverage that supplements no-fault insurance, e.g., income protection in excess of the no-fault maximum.11 Medicare coverage for hospitalization and medical expenses resulting from an auto accident does not supplement but rather necessarily duplicates no-fault coverage, which the opinion of the Court does not expressly recognize.
*215Even if not making coordination under § 3109a mandatory reflects a legislative purpose to allow the purchase of additional insurance, and assuring that this purpose was intended to permit the purchase of duplicative rather than supplemental coverage, it requires still another jump to conclude that this legislative purpose extends to giving the option of choosing the very duplication that § 3109(1) expressly bars.
Such a conclusion reverses the basic purpose of § 3109a. Rather than facilitating coordination, § 3109a thereby facilitates not only duplication, but duplication of the very sort barred under § 3109(1).
I am particularly reluctant to extend the legislative purpose identified by the majority so far as to work as an amendment of § 3109(1) in part because there is an alternative, equally plausible, explanation of why coordination of coverage under § 3109a was not made mandatory. To have made coordination mandatory would have required deciding which insurer would be primary — the no-fault insurer or the general health insurer. Only the primary insurer would receive the premium dollars of the insureds. Rather than choose which insurer would be primary, the Legislature may have made coordination optional as a compromise, in effect leaving it to each insured to decide which insurer would be primary.
We are not privy to the give and take of the legislative process during which it was decided not to make coordination of coverage under § 3109a mandatory, nor do we know much about the insurance business or the complexities, real or imagined, which were presented to the Legislature as it attempted to reconcile the objective of reducing the cost of no-fault insurance to consumers with *216the desires of both health care insurers and auto insurers to provide, and receive premiums for, primary coverage. Unlike the majority, however, I am not persuaded that the Legislature, in using language which permits duplicative recovery, meant to encourage duplicative coverages in the health care area, and specifically that such purpose extends to an amendment by implication of § 3109(1) to eliminate the mandatory setoff of Medicare benefits.
C
I agree with the majority that the insurer’s obligation under § 3109a to offer deductibles and exclusions for other health and accident coverage of the insured is not limited to non-governmental accident and health coverage. Medicare is health and accident coverage and thus deductibles and rate reductions must be offered by the insurer. Medicare benefits, as benefits required to be paid under state or federal law, nevertheless are within the scope of § 3109(1).
Perhaps the majority has been swayed by the inequity of allowing an auto insurer the benefit of the setoff against benefits it must pay out under § 3109(1) when that auto insurer did not reduce the premium it charged to reflect the savings to be realized by that setoff. To be sure, reading the sections as independent results in a windfall for a no-fault insurer that has not coordinated its coverage under § 3109a in light of Medicare, since that insurer will have collected premiums to insure against loss that will actually be reimbursed by Medicare.
Courts must, however, exercise special care when considering individual claims of hardship or injustice allegedly caused by a statute with such *217broad remedial purposes as the no-fault act. Such society-wide programs almost necessarily work occasional. injustice in order to provide a fairer system to the majority. Courts naturally tend to focus on the equities of the case before them; they have limited ability, expertise or authority to assess either the fairness of the entire system or the effect on that system of any individual decision. Yet by attempting to reach a fair result in the case before it, a court may unwittingly sacrifice some measure of the fairness of the program as a whole.
Such is the case here. It may be unfair that the statute deprives the plaintiff of some measure of the benefits he purchased. It is essential, however, to the viability of the no-fault program that the costs of no-fault insurance be restrained. This reduction of costs is the primary purpose of both § 3109(1) and § 3109a.
It should be noted, moreover, that the opinion of the Court, while admittedly removing the no-fault insurer’s windfall, provides no more actual encouragement for insurers to coordinate coverage under § 3109a than does my construction. Insurers make money by collecting premiums that will produce revenue in excess of the benefits they must pay. While the opinion of the Court requires insurers to pay all benefits under coverage for which they have collected premiums, it does not change the profitability of providing that coverage. Given continued profitability, insurers can be expected to continue to sell full coverage, regardless of the fact that the benefits they pay will duplicate benefits received under Medicare.
The Legislature’s basic objective of reducing the cost of insurance through coordinating coverage may be more effectively achieved by recognizing *218that the Insurance Bureau has the responsibility for enforcement of § 3109a’s requirement to offer coordinated coverage. Requiring insurance companies to pay out duplicative benefits simply because duplicative premiums have been collected will not reduce the cost of insurance for the insured.
I suspect that any failure to coordinate Medicare coverage in the past may have been due to either the misconstruction of § 3109a as not reaching Medicare or, more likely, the failure of insurance agents to inquire as to other general health coverage that policyholders may have and to offer and explain coordinated coverage. I doubt that there are many policyholders who would not accept coordination if offered. Few people want redundant medical expense coverage or, to put it differently, are willing to pay for it. No one, despite what the opinion of the Court states, needs duplicative reimbursement of medical expenses.
The opinion of the Court in effect decides that when such failure to inquire as to other insurance coverage occurs, there will be duplicative recoveries. I would not require such duplicative payment of benefits and would look to the Insurance Bureau or to the Legislature if more is needed to enforce the act’s requirement that agents of no-fault insurers actually offer and explain at the point of sale, rather than merely have available, coordinated policies with reduced premiums to reflect an insured’s Medicare coverage.
D
The construction of § 3109a which I believe correct is in accord with that of the Insurance Bureau, the agency charged with administering the act. Between the enactment of § 3109a and its effective date, the Commissioner of Insurance is*219sued Bulletin AD 74-2, providing guidelines to be followed in implementing the new law:
"Attached are guidelines to be followed when filing your company’s coordination of benefits program.
"Basically, the act [1974 PA 72] requires that automobile insurers must offer excess no-fault benefits to allow individuals who have health coverage which duplicates coverage under no-fault to eliminate the duplication.
"The act applies to commercial and personal automobile insurance, but to the extent commercial rates have already been reduced to take account of workmen’s compensation benefits or other statutorily required benefits, no further reductions would be required. * * * Note that coordination with statutory programs is defined by statute. For your information Medicare is a primary health program. ” (Emphasis changed.)12
Two inferences may be drawn from Bulletin AD 74-2. The first is that Medicare, like workers’ compensation, is considered by the agency to be a statutory program whose coordination is defined by statute, i.e., § 3109(1). The second is that since Medicare benefits are necessarily primary, deductions and exclusions, with appropriately reduced premiums, must be offered by the no-fault insurer under § 3109a.
This is the construction of the two sections that I would adopt. I agree with the Commissioner of Insurance that § 3109a does not provide authority to ignore the character of Medicare as a statutorily required benefit.
Insurers who fail to offer reduced premium rates based on "other accident and health coverage” *220which also falls within the mandatory setoff provisions of § 3109(1) are subject to compliance proceedings by the Commissioner of Insurance.
E
The distinction drawn by the Court between "benefits” and "coverage” is not sound. All insurance is "coverage” against a particular contingency. If that contingency occurs, the insurer is obligated to pay "benefits”. Section 3109(1) requires the coordination of "benefits” paid to motor vehicle accident victims after an accident occurs. Section 3109a speaks of "coverages” offered and premiums paid before the event. It is the subject of the two provisions that dictated the Legislature’s choice of words; that choice does not evidence a legislative intent to remove benefits paid pursuant to governmental health and accident coverage from the mandatory setoff applicable to all other kinds of benefits provided under state or federal law.
Further, the Court’s construction establishes a distinction which I believe will prove untenable. By finding that § 3109a and § 3109(1) are mutually exclusive, the Court requires a determination whether anyy'particular government benefit is to be considered "coverage”. If the benefit results from "coverage”, no setoff under § 3109(1) is required; if it does not, setoff is required.
What is "coverage”? Could not workers’ compensation, for example, be considered insurance coverage for work-related injuries? Yet, in Mathis, supra, we held that workers’ compensation must be set off under § 3109(1). The Court departs from the intelligible governmental/non-governmental distinction established by § 3109(1) and previously maintained by this Court in favor of a distinction *221whose meaning is uncertain and for which the act provides little guidance.
II
Justice Ryan states that Part B Medicare benefits (covering medical expenses) should be treated differently under § 3109(1) than Part A Medicare benefits (covering hospital expenses). In contrast with Part A, under which all qualified persons receive benefits, participation in Part B is voluntary, with half the cost met by premiums paid by the voluntary participants and the other half by governmental appropriations. Justice Ryan argues, therefore, that Part B has a hybrid character: so much of Part B benefits as are supported by premiums have the character of private insurance benefits, not requiring setoff under § 3109(1); and so much of Part B benefits as are supported by government appropriations have the character of ”[b]enefits provided or required to be provided under the laws of * * * the federal government”, requiring setoff under § 3109(1).
While such a distinction might make § 3109(1) a better statute, it would also make it a different statute. We must take the statute as it is. Part B Medicare benefits come within the literal terms of § 3109(1) as benefits provided under federal law. Setoff is required absent a showing of a legislative purpose justifying judicial departure from this literal meaning. Such a showing has not been made here.
My colleague’s construction would limit the governmental benefits available for setoff, thereby increasing the costs of no-fault insurance. Absent a persuasive showing that such was the legislative purpose, I would enforce the literal language and primary purpose of § 3109(1), cost reduction.
*222The legislative history does not show a legislative purpose to distinguish governmental benefits according to whether participation is voluntary or involuntary. Without such a showing, it is beyond our authority to so differentiate governmental benefits.
As set forth in O’Donnell, supra, the distinction in § 3109(1) between benefits provided under law and other benefits was the result of a legislative compromise. The Legislature wished to reduce the cost of no-fault insurance by requiring setoff of benefits received from collateral sources while still allowing persons needing income protection in excess of no-fault máximums to obtain supplemental benefits. This legislative history would support excepting certain government benefits from the setoff requirement only if those benefits were supplemental to no-fault benefits and were designed to provide additional income protection where a no-fault benefit ceiling would leave some persons underinsured.
Part B Medicare benefits provide medical benefits, not income protection. Further, no-fault medical benefits, in contrast with no-fault income protection benefits, are not subject to any benefit ceiling, and thus cannot be said to come within the legislative purpose of allowing private supplementation. Finally, Part B Medicare benefits reimburse the same medical expenses as are reimbursed by no-fault benefits, and are therefore in fact duplicative rather than supplemental.
Ill
The insured’s argument that § 3109(1) is unconstitutional as applied to Medicare benefits assumes that if such benefits are within that section they cannot be within § 3109a. Medicare recipients, who *223have paid premiums for such coverage as well as for no-fault coverage, would bear the entire cost of the coordination of Medicare benefits with no-fault benefits in the form of a setoff but would receive only a portion of the corresponding benefit in the form of the savings to the no-fault insurance purchasing public at large. Other health and accident insureds would receive the full benefit of coordination through no-fault premium reductions based on deductibles reasonably related to their health and accident coverage.
Medicare insureds as well as other health and accident insureds must, however, be offered premium rates reflecting deductibles and exclusions related to Medicare coverage. Since Medicare insureds derive the same benefit from coordination as do all other health and accident insureds, there is no differential treatment amounting to a denial of equal protection.13
*224I would affirm the decision of the Court of Appeals.
Kavanagh, J., concurred with Levin, J.

 MCL 500.3109 subd (1); MSA 24.13109 subd (1).

 MCL 500.3109a; MSA 24.13109(1).

 Such a construction is not novel. See HR 13048 (95th Cong, 2d Sess, June 8, 1978) "Standards for No-Fault Motor Vehicle Accidents Benefits Act”, which provides:
"Sec. 109. Avoidance of Duplication.
"(a) In General. — (1) An approved State plan shall establish, and the commissioner shall implement, a provision that fairly and equitably—
"(A) eliminates any unintended duplication in the benefits otherwise available with respect to a victim or any survivor with respect to any injury; and
"(B) passes on the cost savings which result from that elimination to all persons who would otherwise be entitled to receive those duplicative benefits, or utilizes the savings to defray the cost of other benefits.
"(c) Reduction for Benefits Received From Governments. — An approved State plan shall provide that all benefits (less reasonably incurred collection costs) that an individual receives pursuant to entitlement, or is entitled to receive, with respect to an injury, from—
"(1) social security (except benefits under title XIX of the Social Security Act [Medicaid]); * * *
"shall be subtracted in calculating basic no-fault benefits, unless the law authorizing or providing for those benefits makes them secondary to or duplicative of basic no-fault benefits.”

 People v Johnson, 270 Mich 622, 623-624; 259 NW 343 (1935); 1A Sands, Sutherland’s Statutory Construction, § 22.35, p 197.

 Uniform Motor Vehicle Accident Reparations Act. See 14 ULA, Civil Procedural and Remedial Acts, pp 41 et seq. UMVARA was drafted by the National Conference on Uniform State Laws under a contract with the United States Department of Transportation.

 Motor Vehicle Basic Protection Insurance Act, see Keeton & O’Connell, Basic Protection for the Traffic Victim: A Blueprint for Reforming Automobile Insurance (Little, Brown & Co, 1965).

 Mathis v Interstate Motor Freight System, 408 Mich 164; 289 NW2d 708 (1980).

 O’Donnell v State Farm Mutual Automobile Ins Co, 404 Mich 524; 273 NW2d 829 (1979).

 42 USC 401 et seq.

 Comment to UMVARA § 11(a), 14 ULA, pp 78-79.

 MCL 500.3107(b); MSA 24.13107(b); MCL 500.3108; MSA 24.13108.

 Insurance Department Bulletin AD 74-2 (issued as ED-1), April 15, 1974.

 In Neumann v Transit Casualty Co, 96 Mich App 472; 292 NW2d 555 (1980), the Court of Appeals held that the distinction in § 3109(1) between voluntarily purchased private insurance benefits and voluntarily purchased governmental insurance benefits was not rationally related to a legitimate governmental purpose, and therefore violated equal protection. While LeBlanc has not made this argument here, the issue should be addressed.
I disagree with the Court of Appeals conclusion in Neumann. The Legislature could rationally have decided that most governmental benefit programs are financed, in whole or in part, by public monies and are designed, in whole or in part, to achieve social purposes beyond simply providing a service (here insurance) for a fee. Distinguishing such governmental programs from private programs does not violate the "rational relation” analysis under the Equal Protection Clause. Under that least strict of equal protection standards, the Legislature need not fine tune its distinction to precisely except that portion of governmental benefit programs not to any degree funded with public monies or infused with public policy, if indeed any such programs exist.
Further, the Legislature could rationally distinguish between governmental agencies as payors and private insurance companies as payors. Not only is the solvency of the governmental payor a virtual certainty, but it may be presumed that the governmental payor will not be influenced by any profit-maintenance considerations in determining whether a participant is entitled to a particular benefit or amount of benefits.