John Hancock Property & Cas. Ins. Companies v. Blue Cross & Blue Shield of Michigan, Docket No. 106711

• Decision Date: 26 October 1989
• Docket Number: Docket No. 106711
• Citation: 446 N.W.2d 883,180 Mich.App. 242
• Parties: , 27 Soc.Sec.Rep.Ser. 497 JOHN HANCOCK PROPERTY & CASUALTY INSURANCE COMPANIES, Plaintiff-Appellee, v. BLUE CROSS & BLUE SHIELD OF MICHIGAN, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 883

446 N.W.2d 883

180 Mich.App. 242, 27 Soc.Sec.Rep.Ser. 497

JOHN HANCOCK PROPERTY & CASUALTY INSURANCE COMPANIES Plaintiff-Appellee, v. BLUE CROSS & BLUE SHIELD OF MICHIGAN, Defendant-Appellant.

Docket No. 106711.

Court of Appeals of Michigan.

Submitted April 17, 1989.

Decided Sept. 18, 1989.

Released for Publication Oct. 26, 1989.

Garan, Lucow, Miller, Seward, Cooper & Becker, P.C. by John P. Seyfried, Daniel S. Saylor and Ann M. Cisco, Detroit, for plaintiff-appellee.

Jody M. McLeod, and Foster, Swift, Collins & Coey, P.C. by Kevin J. O'Dowd and Brian A. Kaser, Lansing, for defendant-appellant.

Dykema, Gossett by H. Terrence Smith and K. Roxanne McKee, Detroit, for Ass'n of Health Maintenance Organizations in Michigan, Inc., amicus curiae.

Before DOCTOROFF, P.J., and MAHER and REILLY, JJ.

REILLY, Judge.

Defendant appeals as of right from the trial court's order granting summary disposition to plaintiff. The trial court concluded as a matter of law that defendant was primarily liable for the medical expenses incurred by an insured party following an automobile accident. We affirm.

The insured party, Anna Heinsman, was injured in an automobile accident in November of 1985. At the time, Heinsman was insured under a no-fault insurance policy issued by plaintiff and a group health insurance policy issued by defendant. Following the accident, plaintiff paid Heinsman's medical expenses pursuant to the personal injury protection provision in the no-fault policy. However, the policy also included a coordinated benefits clause which provided that plaintiff was liable for PIP benefits only in excess of medical coverage provided by other health insurance policies.

Referring to this clause, plaintiff filed the instant action in May of 1987 seeking reimbursement from defendant for the PIP benefits plaintiff already paid to Heinsman under its no-fault policy, and a declaration that defendant was primarily liable for future medical expenses which might arise. Plaintiff asserted that defendant was primarily liable for these costs pursuant to § 3109a of the no-fault insurance act, M.C.L. § 500.3101 et seq.; M.S.A. § 24.13101 et seq., which requires no-fault insurers to offer "at appropriately reduced premium rates, deductibles and exclusions reasonably related to other health and accident coverage on the insured." The trial court agreed and granted summary disposition to plaintiff, basing its decision on Federal Kemper Ins. Co., Inc. v. Health Ins. Administration, Inc., 424 Mich. 537, 551, 383 N.W.2d 590 (1986). Interpreting § 3109a, Federal Kemper held that when an insured has health insurance as well as no-fault insurance, both policies offering coordinated benefits, public policy requires that the health insurer be primarily responsible for medical benefits payable to the insured.

On appeal, defendant asserts that it is not primarily liable for Heinsman's medical expenses because its policy covering Heinsman was not a basic, comprehensive health insurance policy, and therefore not the typical "other health and accident coverage" referred to in § 3109a and Federal Kemper, supra. Rather, defendant contends that for a reduced premium, it agreed to provide coverage which is only supplemental to Medicare benefits. Defendant notes that under federal law, Medicare benefits are secondary to no-fault insurance. See 42 U.S.C. § 1395y(b)(1), as amended June 17, 1980. ¹ Thus, defendant argues that its liability is secondary to that of the no-fault carrier. Defendant contends that the trial court erred in applying Federal Kemper to this case because the priorities outlined therein conflict with the priorities established for the Medicare program.

As a preliminary matter, we note that the holding of Federal Kemper was 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 the basic, comprehensive health care coverage considered in Federal Kemper. Supplemental insurance is complementary, 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.

As a general rule of construction, the language of an insurance contract is to be given its ordinary and plain meaning. Jones v. Farm Bureau Mutual Ins. Co., 172 Mich.App. 24, 27, 431 N.W.2d 242 (1988). Further, exclusionary clauses in such contracts are to be strictly construed against the insurer. Allstate Ins. Co. v. Miller, 175 Mich.App. 515, 519, 438 N.W.2d 638 (1989). In the instant case, the general provisions of defendant's policy provide for...