Michigan Supreme Court; Docket Nos. 87342 and 89534; Published
Opinion by Justice Levin; Unanimous
Official Michigan Reporter Citation: 437 Mich 368; Link to Opinion 
STATUTORY INDEXING:
Standards for Deductibility of State and Federal Governmental Benefits [§3109(1)]
Medicare Benefits [§3109(1)]
Coordination with Other Health and Accident Medical Insurance [§3109a]
TOPICAL INDEXING:
Medicare Benefits
CASE SUMMARY:
In this unanimous Opinion by Justice Levin, the Supreme Court reversed the Court of Appeals in these companion cases and held that a health care insurer who writes so-called "Medigap" policies, which provide supplemental insurance to a Medicare recipient, is not liable for medical expenses resulting from a car accident.
The Medigap policies involved in this case were issued by health care insurers to plaintiffs who had purchased coordinated no-fault policies. Under federal law, Medicare is not payable when the payment of a particular medical expense "has been made or can reasonably be expected to be made promptly... under no-fault insurance." In this particular case, the coordinated no-fault insurers paid all medical expenses incurred by their insureds and then sought recovery from the Medigap insurers. In ruling that the Medigap insurers were not obligated to reimburse the coordinated no-fault insurers under the Federal Kemper decision, the Supreme Court reasoned that the health care insurers are providing only supplemental coverage to a form of insurance that excludes payment of car accident medical expenses. There is no indication that these Medigap policies were ever intended to fill the gap-created by the federal government's exclusion of car accident medical expenses from basic Medicare coverage. Therefore, the court ruled that the Medigap insurer is under a duty to provide supplemental coverages only where the underlying Medicare coverage is triggered first. In discussing the impact of Federal Kemper, the court stated:
"Federal Kemper concerned only an effort of a primary health insurer to avoid the operative effect of §3109a, and held only that such an insurer is primary as between the no-fault automobile insurer and the health insurer. Federal Kemper does not oblige a supplemental health care insurer to bear that burden simply because the burden would otherwise be imposed on the no-fault automobile insurer, with the result that persons eligible for Medicare who have only supplemental health care coverage will not be able to purchase no-fault automobile insurance at the reduced cost for coordination with health care insurance."
Finally, Justice Levin stated that the Court of Appeals, in the John Hancock case, "misread a limitation on BCBSM's coverage as enlarging the coverage. In stating that benefits are not available for any service to the extent for which benefits are payable under Medicare, BCBSM did not agree to pay for any service to the extent for which benefits are not payable under Medicare." Therefore, the Court of Appeals decisions were reversed and the coordinated no-fault insurers were denied reimbursement from the Medigap health insurers.
