Insurers push to reduce attendant care hourly rate

Attorneys who represent AAA and other insurers are arguing that the recent case of Bonkowski v. Allstate represents progress in their attempt to reduce the hourly rate that their insurers pay for in-home family attendant care.  We discussed Bonkowski previously on this site, and noted that it was a very unequivocal rejection of Allstate's claims; the Court of Appeals upheld all major aspects of a jury's decision that Allstate had signficantly underpaid Bonkowski's father for care he provided to his catastrophically injured son.  AAA's attorneys are lifting one (admittedly non-binding or "dicta") statement from the Court's opinion to suggest that it was a rejection of market-level payment for attendant care.

The Court's opinion, in the process of ruling in favor of the victim and his father in Bonkowski, had questioned whether the 1983 Supreme Court case entitled Manley v. DAIIE was really good law.  Of course, the Bonkowski Court of Appeals panel would not have the power or the right to "overturn" a prior Supreme Court case, in any event.  Manley had held that in the process of valuing attendant care, the jury could consider what third-party agencies would charge.  Insurers despise that process because home health agencies charge substantially more than they pay their (usually non-professional) attendants, and we all know that medical expenses rise faster than the cost of living. 

For example, last year's numbers showed that a northwest region home health agency would charge about $15.46 per hour for non-skilled attendant care, but would pay the employee somewhere between 7 and 10 dollars per hour.  Insurers want to reap the benefit  of that cost savings (on top of the enormous cost savings they realize when a catastrophically-injured patient is cared for at home--rather than being placed in an institution).  While insurers like to complain that family members are being paid more than strangers would be paid for performing the same task, their insurers refuse to acknowledge that the agency strangers would also receive vacation pay, health benefits, workers compensation insurance (in case of injury) that family members do not receive.  The insurers also choose to overlook the fact that family members end up making their own staffing and administrative arrangements, including respite care or replacement care:  these are essential and valuable services that are included in the agency rate but not paid to the family or third-party attendant.

At least with Justice Taylor being removed from the picture, Michigan insurers cannot assume that  because they asked, they will be able to overturn Manning's long-standing legal interpretation.  They will have to justify the effort to change the law with persuasive public policy.  Given their enormous profits and return on premiums (quoted elsewhere in this blog) and reluctance to reduce premiums, it is hard to find sympathy for these insurers.