LeBlanc v. State Farm Mutual Automobile Insurance

Coleman, C.J.

Section 3109(1)1 of the Michigan no-fault insurance act2 requires a subtraction of benefits provided under the laws of state or federal government from the amount of personal protection insurance benefits payable under any no-fault insurance policy. A second provision of the no-fault act, § 3109a,3 permits a coordination of no-fault personal protection benefits with "other health and accident coverage on the insured”. The principal question presented in this case is whether Medicare payments, made on behalf of a qualifying participant to cover expenses incurred as a consequence of an accident for which no-fault benefits are also payable, must be set off in accordance with § 3109(1) as benefits provided under the laws of the federal government, or whether such payments may be set off under § 3109a as "other health and accident coverage on the insured”. The Court of Appeals ruled in a 2-to-l decision that § 3109(1) requires a set-off of Medicare payments against no-fault benefits otherwise due.4 We reverse the decision of the Court of Appeals. The phrase "other health and accident coverage” contained in § 3109a contemplates benefits provided to qualified participants under the Medicare pro*187gram; thus, Medicare benefits may be coordinated with no-fault personal protection insurance benefits at the option of the insured. In view of our holding on the principal question, we do not reach the constitutional issue framed in our order granting leave to appeal.

I

Plaintiff sustained multiple injuries in a pedestrian/automobile accident which occurred on June 2, 1976, and as a result, required extensive hospitalization and outpatient treatment. At the time of the accident, plaintiff was over the age of 65 and was eligible to receive Medicare benefits pursuant to certain sections of the Social Security Act5 which provide payment for eligible medical expenses on behalf of qualified individuals.6 Plaintiff additionally qualified for personal protection insurance benefits under the no-fault insurance policy issued him by defendant. The policy in question contained a provision mandating a subtraction of benefits payable by a state or federal government from no-fault benefits otherwise due. Defendant does not submit that plaintiff paid a reduced no-fault premium in recognition of his eligibility for Medicare benefits.7

Medicare disbursed a total of $13,539.57 to various providers in payment of hospital and medical *188expenses incurred by plaintiff as a result of his accident.8 Defendant paid no-fault benefits with respect to qualified items of hospital and medical care not covered by Medicare, but refused to compensate plaintiff for those expenses which were picked up by Medicare, claiming that Medicare benefits were required to be subtracted from no-fault benefits under § 3109(1) of the no-fault act.

On April 15, 1977, plaintiff brought an action in circuit court to recover from defendant no-fault benefits for Medicare-reimbursed hospital and medical expenses, and attorney’s fees.9 The circuit court denied the claim for attorney’s fees, but awarded summary judgment in plaintiff’s favor on the set-off issue, relying on O’Donnell v State Farm Mutual Automobile Ins Co, 70 Mich App 487; 245 NW2d 801 (1976).10 Defendant appealed11 to the Court of Appeals, which reversed on the set-off issue in a 2-to-l decision.12 Plaintiff appealed and we granted leave to appeal on the following issues: "(1) whether MCL 500.3109 and 500.3109a; MSA 24.13109 and 24.13109(1) can be construed to allow a no-fault insurer to set off for Medicare benefits; and (2) whether MCL 500.3109; MSA 24.13109 is constitutional if it is construed to allow *189a no-fault insurer to set off for Medicare benefits”.13

II

Before addressing the specific arguments advanced by the parties on appeal, we consider the pertinent statutory provisions, the intent of the Legislature underlying their enactment, and interpretations given them by the courts of this state. Section 3109(1) states:

"Benefits provided or required to be provided under the laws of any state or the federal government shall be subtracted from the personal protection insurance benefits otherwise payable for the injury.”14

This section has been the subject of extensive litigation;15 almost invariably,16 the governmental *190benefits at issue have been social security survivors’ loss benefits and workers’ compensation benefits.

In the leading case concerning § 3109(1), O'Donnell v State Farm Mutual Automobile Ins Co, 404 Mich 524; 273 NW2d 829 (1979), this Court sustained the constitutional validity of the mandatory set-off, confirming that social security survivors’ benefits are required to be subtracted from § 310817 no-fault survivors’ benefits. We observed that government benefits provided as a result of the same accident for which no-fault benefits are also payable, and which serve the same purpose as no-fault benefits, are within the scope of § 3109(1); however, we emphatically stated that our decision in O'Donnell "does not purport to encompass other possible government benefits”. O’Donnell, supra, 538.

In Mathis v Interstate Motor Freight System, 408 Mich 164; 289 NW2d 708 (1980),18 we extended our holding in O’Donnell to workers’ compensation benefits, which we found to be constitutionally subject to the mandatory set-off of § 3109(1).

The Court considered the application of § 3109(1) to somewhat atypical benefits, Medicaid benefits, in Workman v Detroit Automobile Inter-Insurance Exchange, 404 Mich 477; 274 NW2d 373 (1979). However, since we ascertained that Workman was statutorily disqualified from receiving Medicaid benefits because of her eligibility for no-fault benefits, we declined to decide the issue, or otherwise to express an "opinion with respect to the propriety *191of a set-off of redundant, accident-related, ex gratia governmental transfer coverage”, Workman, supra, 486.

The legislative history of § 3109(1) was adequately detailed in O’Donnell, supra, 544-545:19

"The history of § 3109(1) indicates that the Legislature’s intent was to require a set-off of those government benefits that duplicated the no-fault benefits payable because of the accident and thereby reduce or contain the cost of basic insurance.
"In a letter to the Governor from the Commissioner of Insurance analyzing a series of proposed no-fault bills introduced in 1971, none of which contained a set-off provision, the Commissioner criticized the bills because they tended to 'increase the duplication and overlap between auto insurance and other insurance programs, sick leave programs and social security’. Subsequent bills did contain set-off provisions. The final version of § 3109(1) was similar to an amendment suggested by the Commissioner. According to the Commissioner, the purpose of the amendment was 'to provide a more complete and effective coordination of benefits between Michigan auto insurance and the benefits provided by the laws of all the states and the federal government’. As noted by Justice Williams in his opinion in this case, the Commissioner’s comments 'make clear that the purpose of the § 3109(1) statutory scheme was framed in terms of maintaining or reducing premium costs for all insureds through the elimination of duplicative benefits recovery’.”

The second provision of the no-fault act relevant to our discussion herein is § 3109a:

"An insurer providing personal protection insurance benefits shall offer, at appropriately reduced premium rates, deductibles and exclusions reasonably related to *192other health and accident coverage on the insured. The deductibles and exclusions required to be offered by this section shall be subject to prior approval by the commissioner and shall apply only to benefits payable to the person named in the policy, the spouse of the insured and any relative of either domiciled in the same household.”20

In contrast with § 3109(1), § 3109a has been seldom mentioned, much less construed. Nyquist v Aetna Ins Co, 84 Mich App 589; 269 NW2d 687 (1978), aff'd 404 Mich 817; 280 NW2d 792 (1979), merits our attention. In Nyquist, nine named plaintiffs brought an action against Aetna to recover no-fault benefits withheld by Aetna because plaintiffs’ hospitalization expenses had been paid for by Blue Cross-Blue Shield, and because plaintiffs had paid reduced no-fault premiums in electing a coordination of benefits. Plaintiffs principally asserted that Blue Cross-Blue Shield was not "insurance” and therefore did not come within the purview of § 3109a. The Court of Appeals responded:

"[Plaintiffs’ argument is untenable for three reasons.
"First, the legislative history of this provision demonstrates that coordination of Blue Cross-Blue Shield benefits with personal injury insurance protection was a primary concern * * *.
"We also note that § 3109a uses the word 'coverage’ rather than 'insurance’; the use of the broader term militates against plaintiffs’ restrictive reading of the section at issue.

"Secondly, documents that were part of the record below show that the Commissioner and Deputy Commissioner of Insurance have taken the position that medical and hospitalization plans such as Blue Cross-*193Blue Shield fall within § 3109a. We give particular weight to the interpretations of those charged with the implementation and enforcement of a statute. See Boyer-Campbell Co v Fry, 271 Mich 282; 260 NW 165 (1935).

"Finally, the plain purpose of § 3109a was to reduce premiums by eliminating duplicate coverage. It is undisputed that personal injury insurance benefits overlap with medical and hospitalization benefits. Thus, plaintiffs’ restrictive reading of § 3109a would subvert the clear purpose of the legislation.” Nyquist, supra, 591-592.

The Court of Appeals, in a second case discussing the permissive set-off provision, Orr v Detroit Automobile Inter-Insurance Exchange, 90 Mich App 687; 282 NW2d 177 (1979), held that sick leave accumulated by an employee was not health and accident coverage as set forth in § 3109a.21

Although our primary focus in O’Donnell was upon the constitutionality of § 3109(l)’s mandatory set-off, we also concluded that § 3109a is constitutional, commenting:

"Section 3109(1) did not attempt to address the problem of overlapping no-fault and private health or accident insurance benefits. Soon after the No-Fault Act was passed by the Legislature, however, an attempt was made to fine-tune the set-off provisions so that this kind of duplication could be reduced while still permitting persons with needs exceeding the benefits provided by no-fault insurance to obtain the extra coverage they required. The Legislature enacted § 3109a * * *.
"Although the Legislature did not choose to make this set-off mandatory, as it had done with § 3109(l)’s government benefit set-off, this distinction is justified by the perceived necessity of making it possible for persons *194with greater needs to obtain the coverage they require and pay reduced rates on the no-fault insurance through deductibles and exclusions approved by the Commissioner. That some persons can still slip through the colander of § 3109a and receive additional benefits does not mean the statute is unconstitutional. Mathematical precision is neither possible nor required.
"Section 3109a promotes the valid legislative objective of reducing duplicative benefits; the means chosen is rationally related to that end; and the distinctions drawn are supported by a rational basis. This statute is also constitutional.” O’Donnell, supra, 550-551.

Crucial to our analysis in this case are two documents which tend to clarify the intent of the Legislature in enacting § 3109a. The first is a letter addressed to the Governor from the Commissioner of Insurance22 which explains the purpose of 1974 House Bill 572423 and summarizes the arguments in favor of the bill:

"The bill requires automobile insurers to offer to their insureds personal protection insurance benefits with exclusions and deductibles which relate to other health and accident coverage on the insured. Offer of such deductibles and exclusions will virtually eliminate the current overlap of coverage which occurs when an insured has both the no-fault personal protection benefits and other health and accident coverage which, like the personal protection benefits, covers medical expenses connected with auto accidents and other accidents.
"The bill will eliminate or drastically reduce the incidence of overlapping coverage for medical expenses related to automobile accidents and hence reduce the cost of such insurance to the insured.
"The bill will require that persons covered by the *195Medicare program be given personal injury protection benefits at reduced rates. Currently, some automobile insurers do not provide reduced personal protection rates to persons covered under the Medicare program. The only reduction available to all retired persons is due to their lower income not their Medicare benefits, if any.
"The bill would make it possible to eliminate the current situation in which persons insured under accident and health policies which include medical expense and loss of wages benefits may collect benefits from such coverage and from their no-fault personal protection benefits. This double recovery is contrary to public policy in that it is wasteful and can result in an insured receiving more income when recuperating than when working.
"The bill gives each consumer the chance to select or reject deductibles based on his existing non-automotive health and accident coverage. Currently, insurers writing approximately 90% of Michigan’s no-fault coverage do not allow the consumer to make such a choice.”24

The second item is an analysis of HB 5724 prepared by the House Insurance Committee,25 which largely echoes the arguments and purposes set forth in the Insurance Commissioner’s letter to the Governor:

’’The Apparent Problem to Which the Bill Addresses Itself:
"Since the advent of compulsory no-fault automobile insurance last October, auto insurance premiums have not been reduced as some persons had anticipated. Many believe the average driver is overbuying in regards [sic] to accident and medical insurance since no-fault coverage overlaps with portions of the medical *196coverage offered by the private accident and health insurers and the group plans of Blue Cross and Blue Shield. Some persons claim Michigan residents should not be required to pay for this duplicate coverage and that automobile insurers should offer deductions and exclusions at reduced premiums to those who pay for similar coverage under other health and accident plans. Further, many contend this elimination of duplicate coverage by the no-fault insurers would result in a substantial savings [sic] to Michigan drivers.
"Argument For:
"The bill would save millions of dollars for Michigan drivers and would offer them an opportunity to eliminate their duplicate, overlapping insurance coverage since automobile insurers would be required to offer deductibles of exclusions which wrap-around a policyholder’s health and accident coverage. No-fault insurers would offer these deductions at reduced premiums, and State insurance officials estimate the 5 to 6 million Michigan drivers could save $100 million annually.
"Argument For:
"Passage of the bill would create more flexibility in health and accident coverage by offering consumers an insurance option which the vast majority of underwriters operating in Michigan do not offer. Further, if the Blue Cross/Blue Shield plans gain approval for their proposed modifications, the consumer seeking health and accident coverage will have yet another option from which to choose. The bill does not make it mandatory for an insurance buyer to select these deductibles and exclusions so many could still opt for overlapping coverage.
"Argument For:
"The skyrocketing hospital and medical costs could be contained to a greater extent with health and accident as the primary coverage since these policies, like the Blue Cross/Blue Shield plans, have established limits on their reimbursement of doctor and hospital expenses. A physician who knows his or her patient has *197unlimited medical coverage has no incentive to keep the doctor bill at a minimum.”26

In summary, § 3109(1) requires a subtraction of government benefits from no-fault benefits otherwise payable. The provision exists to eliminate duplicative recovery and to contain insurance costs. Reduction of insurance costs is implemented under § 3109(1) by spreading the savings among all no-fault consumers. This Court has thus far found that social security survivors’ benefits and workers’ compensation benefits are subject to the mandatory set-off provision.

Section 3109a permits a set-off of "other health and accident coverage” at the insured’s option. This provision, like § 3109(1), serves to eliminate duplicative recovery and to contain or reduce insurance costs; additionally, it allows individuals to tailor their insurance coverage to their own special needs. Cost reduction is implemented under § 3109a on an individual basis rather than in blanket fashion. Blue Cross-Blue Shield has been deemed one form of "other health and accident coverage” qualifying for permissive coordination of benefits under § 3109a.

Ill

Medicare has been variously defined as " 'social welfare legislation passed by the Congress to aid the general health and welfare of those over 65 years of age’ ”, Imvris v Michigan Millers Mutual Ins Co, 39 Mich App 406, 410; 198 NW2d 36 (1972),27 and as "a federally funded and adminis*198tered program created by Title XVIII of the Social Security Act providing hospital and outpatient insurance benefits to elderly persons”, American Medical Ass’n v Weinberger, 395 F Supp 515, 518 (ND Ill, 1975). The 1965 enactment28 of Medicare into the Social Security Act "established the federal government as the largest health insurer in the United States”. American Medical Ass’n, supra, 518.

Medicare is a two-part program, each part distinct with regard to benefits, coverage, financing and administration.29 Part A of Medicare, known as the "hospital coverage” is incorporated into the existing social security structure,30 and is designed to assist in the payment of services for inpatient hospital care, skilled nursing care and certain home health care.31 To be eligible for Part A benefits, an individual must be aged 65 or older, and must meet conditions for cash social security benefits.32 Most persons aged 65 or older automatically qualify for Part A benefits. Part A coverage is wholly financed through universal and mandatory contributions from employers, employees, and self-employed people, and thus entails no monthly premium on behalf of a qualifying participant.33 Persons who meet the age requirements and who *199are enrolled in Part B, but who have not worked long enough to satisfy the other conditions for participation in Part A, may purchase Part A coverage by paying a monthly premium which is said to represent the cost of Medicare hospital protection.34 Amounts paid as employee and self-employment taxes under the Internal Revenue Code do not qualify as amounts paid for insurance, and are not deductible as medical expenses.35

Participation in Part B of the Medicare program, termed the "medical coverage” or the "physician coverage” is voluntary, and is open to any individual aged 65 or older,36 except nonresident aliens.37 In contrast with Part A coverage, some individuals must apply for Part B coverage to be eligible for it.38 Moreover, delay in applying for Part B coverage results in a 10% increase in the amount of monthly premium for each year of delay.39 Once enrolled in Part B, an individual may cease participation either by filing a written no*200tice, or by failing to pay the premium.40 Former Part B participants are permitted to re-enroll only once, and at a higher premium.41 Part B of Medicare pays 80% of reasonable charges in excess of a moderate deductible for physicians’ services, outpatient hospital services, home health visits, outpatient physical therapy and speech pathology services, ambulance services, some chiropractic services, and other physician-prescribed health and medical services.42 Financing of Part B is accomplished through an exaction of monthly premiums of a uniform amount from enrollees43 and, at a minimum, matching contributions from the federal general appropriations fund.44 Premiums, paid either by direct payment or by automatic deduction from the participant’s social security benefit check, can be increased only if there has been a general increase in social security cash benefits during the previous year.45 Because any premium increase cannot exceed the percentage increase in cash benefits, the share assumed by the federal government is necessarily enlarged.46 Part B premiums qualify as amounts paid for insurance covering medical care under the Internal Revenue Code, and are deductible as medical expenses.47 Correlatively, Part B benefits received are in the *201nature of medical insurance proceeds, and are excluded from gross income under federal income tax provisions.48

IV

We first address defendant’s contention that the phrase "other health and accident coverage” contained in § 3109a refers to "coverage other than that provided or required to be provided under the laws of any state or the federal government”,49 i.e., coverage other than the governmental benefits of § 3109(1) which, defendant posits, include Medicare benefits. For several reasons, we believe that such a construction is incompatible with and unwarranted by a common-sense reading of the text of § 3109a. Section 3109a makes no internal reference, express or implied, to § 3109(1); thus an interpretation dependent upon language set forth in § 3109(1) is pointless. Furthermore, the fact that "other health and accident coverage” immediately follows a reference to "personal protection insurance benefits” compels a conclusion that "other health and accident coverage” clearly means coverage other than personal protection insurance benefits payable under any no-fault policy.

V

Defendant asserts that Medicare benefits are unquestionably within the purview of § 3109(1) because they are provided pursuant to federal law, are administered by agencies of the federal govern*202ment, and are funded by federal tax schemes. Accordingly, Medicare payments do not qualify for § 3109a’s permissive set-off because they are not private benefits, as characterized by this Court in O’Donnell. Defendant believes that the plain meaning of § 3109(1), coupled with the intent of the Legislature in enacting the mandatory set-off provision, necessitate a conclusion that Medicare benefits are government benefits for purposes of § 3109(1).

Defendant’s analysis is certainly plausible, but it is not eminently persuasive.

Our holding is not predicated upon the governmental/private benefits dichotomy as urged by defendant. However enticing such a simple resolution might be, we are convinced that it is not the correct one insofar as Medicare benefits are concerned. It is indisputable that § 3109(1) contemplates benefits derived from a collateral governmental source; it is not equally indisputable that § 3109a applies only to "other health and accident coverage” obtained from a collateral private source. On its face, § 3109a is not so limited. While we acknowledge that the distinction between private and governmental benefits repeatedly surfaced throughout our discussion in O’Donnell, and that we there characterized § 3109a as relating to private benefits, suffice it to say that our concerns in O’Donnell were radically different from those confronting us here, and that we precisely confined O’Donnell to its facts.

The legislative history of § 3109a suggests that the Legislature, in leaving the phrase "other health and accident coverage” unmodified by the word private, intended to give unrestrained application of § 3109a to health and accident coverage from whatever source. The analysis of HB 5724 *203prepared by the House Insurance Committee indicates that the bill would eliminate duplicate cover-' age by making private accident and health insurance, as well as the group plans of Blue Cross and Blue Shield, primary sources of reimbursement for accident-related medical and hospital expenses. Thus, both private and non-private50 plans were within the scope of the bill. Further, in his letter to the Governor regarding HB 5724, the Insurance Commissioner expressed his view that Medicare recipients must be offered no-fault personal injury protection benefits at reduced rates under the bill. We presume that the Legislature reflected upon the Insurance Commissioner’s position in enacting § 3109a, and we give some weight to the interpretation given a statute by the official charged with its enforcement. Magreta v Ambassador Steel Co, 380 Mich 513, 519; 158 NW2d 473 (1968).

That participants in the Medicare program qualify for permissive coordination of benefits under § 3109a, rather than for mandatory coordination of benefits under § 3109(1), is forcefully demonstrated by the Legislature’s deliberate use of distinct words to describe the items subject to set-off in the two provisions. Section 3109(1), enacted as a portion of the original no-fault act, is clearly addressed to government beneñts. In a general sense, benefits are those things which promote an indi*204vidual’s welfare, advantage or profit. See Salisbury v United States, 377 F2d 700, 706 (CA 2, 1967); State ex rel Hardesty v Aracoma-Chief Logan No 4523, Veterans of Foreign Wars of the United States, Inc, 147 W Va 645, 650; 129 SE2d 921, 924-925 (1963). In contrast to § 3109(1) is the later-enacted § 3109a, which more specifically speaks to other health and accident coverage. "Coverage”, a word of precise meaning in the insurance industry, refers to protection afforded by an insurance policy, or the sum of the risks assumed by a policy of insurance. See D'Angelo v Cornell Paperboard Products Co, 59 Wis 2d 46, 51; 207 NW2d 846, 849 (1973); Freimuth v Glens Falls Ins Co, 50 Wash 2d 621, 625; 314 P2d 468, 471 (1957). In discussing whether an employee’s sick leave program constituted "other health and accident coverage” under § 3109a, the Court of Appeals in Orr, supra, 690, commented:

"The noninadvertent use of the word 'coverage’ in this section of the no-fault act, when the rest of the no-fault act refers to benefits, clearly indicates that the Legislature intended § 3109a, deductibles and exclusions, to be limited to health and accident insurance coverage upon the insured.”

We join in the belief of the Court of Appeals that the Legislature’s choice of the word "coverage” to delineate the perimeters of § 3109a was "noninadvertent”. We are also of the view that the Legislature’s enactment of § 3109a, which is narrowly limited to "coverage” and which is not expressly confined to private forms of such "coverage”, evinces an intent to provide unique treatment to health and accident insurance, as opposed to other perhaps equally duplicative "benefits”.

*205Medicare is "other health and accident coverage” qualifying for § 3109a’s permissive set-off. We perceive no just reason to differentiate Medicare from other, more traditional, forms of health and accident coverage which irrefutably are within the scope of § 3109a. Just like any so-called private insurer, Medicare compensates providers of medical and hospital services on behalf of participants who require health care.51 It is inconsequential that in other contexts52 Medicare has been deemed not to be insurance in the usual sense of the term: the same has been said of Blue Cross and Blue Shield plans which, according to Nyquist, fall within § 3109a. Blue Cross & Blue Shield of Michigan v Insurance Comm’r, 403 Mich 399; 270 NW2d 845 (1978).

By construing § 3109a to embrace Medicare ben*206efits,53 we do no violence to the legislative intent underlying the provision; indeed, our interpretation comports with and fosters the purposes of § 3109a. Like § 3109(1), § 3109a exists to eliminate duplicative recovery and to contain or reduce insurance costs. These worthy goals are promoted by including Medicare within § 3109a, since, as Medicare participants opt to coordinate their Medicare benefits with their no-fault benefits, they obtain a direct reduction of no-fault premiums and forego dual recovery. However, § 3109a also recognizes that certain persons possess unique requirements which necessitate additional health and accident coverage; hence the optional facet of § 3109a’s coordination of benefits. Medicare’s exclusive application to the elderly population,54 which frequently has an expanded need for health care, provides a convincing reason for including it within § 3109a.

VI

Medicare constitutes "other health and accident coverage” within the meaning of § 3109a of the no-fault act. Thus, payments made to health care providers pursuant to the Medicare program for expenses arising out of the same accident for which no-fault benefits are also payable may be subtracted from payable no-fault benefits at the option of the insured. Since plaintiff in the instant case did not elect to coordinate his Medicare benefits with his no-fault benefits, payments made on *207his behalf by the Medicare program may not be subtracted from the no-fault benefits due under the no-fault policy issued to him by defendant. We do not reach the constitutional issue presented on appeal, nor do we express an opinion with regard to the inclusion of other possible forms of health and accident coverage within the purview of § 3109a.

The decision of the Court of Appeals is reversed.

Williams, Fitzgerald, and Blair Moody, Jr., JJ., concurred with Coleman, C.J.

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

1972 PA 294, MCL 500.3101 et seq.; MSA 24.13101 et seq.

MCL 500.3109a; MSA 24.13109(1).

87 Mich App 555; 274 NW2d 69 (1978).

42 USC 401 et seq.

42 USC 1395-1395rr.

The policy issued plaintiff by defendant was not made a part of the record on appeal. At the request of the clerk’s office, plaintiffs counsel submitted a certified true copy of the policy to the Court, along with a copy of plaintiffs premium notice for a subsequent period (the latter item is said to indicate applicable coverages also in effect for the period in which the accident occurred). These documents designate plaintiffs coverage as "P”, meaning that allowable expenses were payable on a primary, rather than on a coordinated, basis with respect to benefits provided under another policy or plan.

The record does not disclose what portion of these expenses was paid pursuant to Part A of the Medicare program, or what portion was paid pursuant to Part B of Medicare. At oral argument on January 9, 1980, counsel for plaintiff implied that plaintiff was a Part B Medicare participant.

MCL 500.3148(1); MSA 24.13148(1) provides for reasonable attorney’s fees in a no-fault action "for advising and representing a claimant in an action for personal or property protection insurance benefits which are overdue”.

At the time judgment was entered in the circuit court, O’Donnell was pending decision by this Court. See 404 Mich 524; 273 NW2d 829 (1979).

Plaintiff cross-appealed the circuit court’s denial of attorney’s fees to the Court of Appeals, which affirmed on that point. 87 Mich App 555, 558; 274 NW2d 69 (1978). Attorney’s fees are no longer in dispute.

87 Mich App 555; 274 NW2d 69 (1978).

406 Mich 1009 (1979).

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

See, e.g; Wysocki v Detroit Automobile Inter-Insurance Exchange, 77 Mich App 565; 258 NW2d 561 (1977), rev’d 406 Mich 860; 275 NW2d 551 (1979); Pollock v Frankenmuth Mutual Ins Co, 79 Mich App 218; 261 NW2d 554 (1977); Smart v Citizens Mutual Ins Co, 83 Mich App 30; 268 NW2d 273 (1978); Hawkins v Auto-Owners Ins Co, 83 Mich App 225; 268 NW2d 534 (1978), aff’d 408 Mich 164; 289 NW2d 708 (1980); Greene v State Farm Mutual Automobile Ins Co, 83 Mich App 505; 268 NW2d 703 (1978); Mielke v Michigan Millers Mutual Ins Co, 82 Mich App 721; 267 NW2d 165 (1978), rev’d 406 Mich 858; 275 NW2d 553 (1979); Ottenwess v Hawkeye-Security Ins Co, 84 Mich App 292; 269 NW2d 570 (1978), rev’d 408 Mich 164; 289 NW2d 708 (1980); Hubert v Citizens Ins Co of America, 88 Mich App 710; 279 NW2d 48 (1979); Lindsey v Hartford Accident & Indemnity Co, 90 Mich App 668; 282 NW2d 440 (1979); Brumfield v Detroit Automobile Inter-Insurance Exchange, 89 Mich App 1; 279 NW2d 293 (1979); Wolford v Travelers Ins Co, 92 Mich App 600; 285 NW2d 383 (1979); Neumann v Transit Casualty Co, 96 Mich App 472; 292 NW2d 555 (1980); O’Donnell v State Farm Mutual Automobile Ins Co, 70 Mich App 487; 245 NW2d 801 (1976), rev’d 404 Mich 524; 273 NW2d 829 (1979); Workman v Detroit Automobile Inter-Insurance Exchange, 404 Mich 477; 274 NW2d 373 (1979); Mathis v Interstate Motor Freight System, 408 Mich 164; 289 NW2d 708 (1980).

Exceptions include Workman v Detroit Automobile Inter-Insur*190ance Exchange, 404 Mich 477; 274 NW2d 373 (1979) (Medicaid benefits), and Neumann v Transit Casualty Co, 96 Mich App 472; 292 NW2d 555 (1980) (supplementary medical insurance benefits, i.e., Part B of Medicare).

MCL 500.3108; MSA 24.13108.

Hawkins v Auto-Owners Ins Co, Ottenwess v Hawkeye-Security Ins Co and In re Certiñed Questions (Joseph v Transport Indemnity Co) were decided with Mathis.

See, also: Gretzinger, O’Donnell v State Farm Mutual Insurance Co: A Judicial Attempt to Amend Michigan’s No-Fault Act, 1977 DCL Rev 187, 191-195.

MCL 500.3109a; MSA 24.13109(1).

See Porter v Michigan Mutual Liability Co (On Remand), 97 Mich App 281; 293 NW2d 799 (1980), for additional mention of § 3109a.

Letter dated February 26, 1974 from Daniel J. Demlow, Commissioner of Insurance, to Governor William G. Milliken.

Subsequently enacted into 1974 PA 72, the present MCL 500.3109a; MSA 24.13109(1).

Letter from Insurance Commissioner Demlow to Governor Milliken, supra, 1-2.

Analysis of 1974 House Bill 5724 prepared by the Analysis Section of the House of Representatives Insurance Committee, containing material complete to February 27, 1974.

House Insurance Committee Analysis, supra, 1.

But see Witherspoon v St Paul Fire & Marine Ins Co, 86 Wash 2d 641, 646; 548 P2d 302, 306 (1976): "Neither Part A nor Part B Medicare constitute a 'welfare plan.’ ”

Added July 30, 1965, 79 Stat 291, 42 USC 1395 et seq.

Witherspoon, supra, 644, citing H. Somers & A. Somers, Medicare and the Hospitals — Issues and Prospects (Washington, DC: The Brookings Institution, 1967), pp 19-20, and referring the reader to Department of Health, Education & Welfare, Pub No SSA 74-10050, Your Medicare Handbook (1974), 44-45. (Note that effective May 4, 1980, HEW has been redesignated the Department of Health and Human Services.)

Witherspoon, supra, 644.

42 USC 1395d; Department of Health, Education & Welfare, Pub No SSA 79-10043, A Brief Explanation of Medicare (May, 1979), 4-6.

42 USC 1395c; Witherspoon, supra, 645.

HEW, A Brief Explanation of Medicare, supra, 13.

According to Department of Health, Education & Welfare, Pub No SSA 05-10050, Your Medicare Handbook (1980), 45, "[t]he basic hospital insurance premium is $69 a month through June 30, 1980. It will increase to $77 a month for the 12-month period starting July 1, 1980. This premium represents the present cost of Medicare hospital insurance protection”.

Witherspoon, supra, 645; Rev Rul 66-216, 1966-2 Cum Bull 100. However, voluntary payments made by a participant for Medicare A coverage qualify as amounts paid for medical insurance under IRC § 213. Rev Rul 79-175, 1979-1 Cum Bull 117.

HEW, A Brief Explanation of Medicare, supra, 8; 42 USC 1395j; 42 USC 1395o; Witherspoon, supra, 645.

Mathews v Diaz, 426 US 67; 96 S Ct 1883; 48 L Ed 2d 478 (1976).

A person receiving social security or railroad retirement benefits is automatically enrolled in Part B of Medicare at the same time he or she becomes eligible for Part A benefits, unless he or she indicates that participation in Part B is not desired. Automatic Part B enrollment does not occur for individuals who are 65 but are not eligible to participate in Part A, or who have permanent kidney failure, or who live in Puerto Rico or foreign countries. HEW, A Brief Explanation of Medicare, supra, 8-9; 42 USC 1395p.

42 USC 1395r; HEW, Your Medicare Handbook (1980), supra, 45.

42 USC 1395q; HEW, Your Medicare Handbook (1980), supra, 46.

42 USC 1395p; HEW, Your Medicare Handbook (1980), supra, 46.

HEW, A Brief Explanation of Medicare, supra, 9-11.

According to HEW, Your Medicare Handbook (1980), supra, 44, "[t]he basic medical insurance premium is $8.70 a month through June 30, 1980. It will increase to $9.60 a month for the 12-month period starting July 1, 1980”.

Witherspoon, supra, 645-646.

HEW, A Brief Explanation of Medicare, 13.

"For the year starting July 1, 1980, the federal government will pay more than two-thirds of the premium cost of medical insurance.” HEW, Your Medicare Handbook (1980), supra, 44.

See IRC § 213(a); Rev Rul 66-216, 1966-2 Cum Bull 100; Witherspoon, supra, 646.

See IRC § 104(a); Rev Rul 70-341, 1970-2 Cum Bull 31 (revoked in part by Rev Rul 79-173, 1979-1 Cum Bull 86, to the extent that it had ruled that basic benefits were includable in determining support for purposes of IRC §§ 151 and 152 — the revocation is not pertinent to our discussion here); Witherspoon, supra, 646.

Defendant’s Brief on Appeal, 4.

Blue Cross and Blue Shield, provided under the auspices of state law, MCL 550.301 et seq., 550.501 et seq.; MSA 24.591 et seq., 24.621 et seq., is not technically a private form of health and accident insurance. BC/BS has been described as a "non-profit, tax-exempt 'charitable and benevolent institution’ incorporated pursuant to special enabling legislation enacted by the Michigan Legislature in 1939, for the purpose of providing a mechanism for broad health care protection to the people of the State of Michigan.” Blue Cross & Blue Shield of Michigan v Insurance Comm’r, 403 Mich 399, 415-416; 270 NW2d 845 (1978). It is interesting to note that Blue Shield of Michigan presently handles medical insurance claims for Michigan Medicare participants. HEW, Your Medicare Handbook (1980), supra, 54.

Part B of Medicare is also akin to traditional forms of health and accident insurance because a contractual sort of relationship arises between the provider of payment and the premium-paying participants. See, generally, Witherspoon, supra. Although it might be said that Part A of Medicare departs from usual modes of insurance because premiums are not directly paid by the participant, we do not exclude Part A of Medicare from application of § 3109a on the basis of this distinction. Part A of Medicare is rendered no less a form of "health and accident coverage” by reason of its peculiar financing structure.

Imvris, supra (Medicare is not "individual, blanket or group accident, disability or hospitalization insurance” within the exclusionary clause of a policy providing payment for medical expenses); Witherspoon, supra (Medicare is not within the deductible amount of a personal catastrophe liability policy; nor does it come within the terms of an exclusion for charges paid for or reimbursable by or through a governmental unit); Wojtkowski v Hartford Accident & Indemnity Co, 27 Ariz App 497; 556 P2d 798 (1976) (Part A of Medicare is not included within a policy’s set-off for medical expenses paid by individual, blanket or group accident insurance, but Part B of Medicare constitutes group insurance within the exclusionary clause). See, also: Jones v Aetna Casualty & Surety Co, 497 SW2d 809 (Mo App, 1973). Note that the explanatory brochures issued by the Department of Health, Education & Welfare regarding Medicare typically refer to both Part A and Part B of Medicare as "insurance”. See, e.g., HEW, A Brief Explanation of Medicare, supra.

Our characterization of Medicare receipts as "benefits” does not contradict our determination that such receipts do not constitute governmental "benefits”, as that term is employed in § 3109(1).

By 1968, approximately 18.6 million elderly persons were covered by both Parts A and B of Medicare; by 1976, the number of elderly participants had grown to approximately 23 million. Witherspoon, supra, 653.