Michigan Court of Appeals; Docket No. 106711; Published
Judges Reilly, Doctoroff, and Maher; Unanimous; (Opinion by Judge Reilly)
Official Michigan Reporter Citation: 180 Mich App 242; Link to Opinion 
STATUTORY INDEXING:
Coordination with Other Health and Accident Medical Insurance [§3109a]
TOPICAL INDEXING:
Medicare Benefits
CASE SUMMARY:
In this unanimous Opinion written by Judge Reilly, the Court of Appeals ruled that defendant Blue Cross/Blue Shield was liable to reimburse plaintiff no-fault insurer who paid medical expenses under a no-fault policy that was coordinated with other health coverages. Defendant Blue Cross argued that the priority liability rule of Federal Kemper v Health Insurance Administration (Item No. 897) should not apply in this case because the Blue Cross policy was intended to provide coverage that was only supplemental to Medicare benefits. Defendant argued that because Medicare benefits are secondary to no-fault, defendant's liability is also secondary to no-fault.
The court rejected defendant's argument on the basis that the language of defendant's policy did not support its position. The policy language in question stated that:
"Benefits are not available under this contract for or on account of... any services to the extent for which benefits are payable under Medicare."
The federal Medicare statute [42 USC 1395Y(b)(l)] makes it clear that Medicare does not pay benefits that are paid by a no-fault insurance company. Therefore, Medicare benefits "are not payable." Defendant's policy, by its terms, is secondary only to those benefits that are payable by Medicare. Because no Medicare benefits are payable, defendant's coordination clause does not absolve it of liability.
It is significant to note that the court indicated that the Federal Kemper rule is:
"... limited to priorities between competing first dollar insurers, both offering comprehensive coordinated benefits. We agree with defendant that supplemental health care coverage is different from basic comprehensive health care coverage considered in Federal Kemper. Supplemental insurance is complimentary, and is not to be construed to be a substitute for the underlying comprehensive coverage. The liability of the supplemental insurer should not exceed the liability assumed in the policy. However, none of these considerations would control in this case, because under the terms of its own policy, defendant agreed to provide full health care coverage to Heinsman, and not merely supplemental Medicare coverage."
