Opting Out of PIP Medical Coverage If You Have Medicare

Under the old Michigan No-Fault insurance which was adopted in 1973, car accidents were not covered by Medicare. This meant that recipients had to charge their medical expenses that were related to the auto accident to their unlimited lifetime Personal Injury Protection (PIP) coverage, a requirement for all motor vehicle owners.

However, new laws that took effect on July 1, 2020 changed this rule. Now, drivers can choose from six different levels of PIP benefits and even opt-out if they prefer to. Provided that certain conditions are met, those covered by Medicare Parts A and B can opt-out of PIP coverage entirely.

If Medicare covers you, here are a few things you should know about the new No-Fault laws in Michigan.

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How Does The 2020 No-Fault Law Affect PIP Medical Coverage?

The new Michigan No-Fault law replaces the exclusive unlimited lifetime PIP coverage with a range of options. These include:

Unlimited coverage which is the same as the old system
$500,000 coverage
$250,000 coverage
$250,000 limit with PIP medical exclusion
$50,000 limit which is available only to recipients of medicaid
$0 coverage which is available only to those enrolled in Medicare A and B

If you are a Michigan No-Fault policyholder, you can choose to keep your old unlimited PIP coverage or select one of the new capped medical coverage options.

What Are The Medical Coverage Options Available to Recipients of Medicare?

Under the new No-Fault law, Medicare recipients may keep their unlimited PIP medical coverage or choose one of the limited options of $500,000 or $250,000. Additionally, if you are enrolled in Medicare Parts A and B, you may entirely opt-out of PIP medical coverage. To opt-out, your spouse and any resident relatives covered by the policy must have their own qualified health coverage (private insurance or a different No-Fault policy with PIP) for car accident injuries.

If I’m Not On Medicare, Can I Still Opt Out?

Yes, the “Limited PIP Medical Coverage of $250,000 with Exclusions” option allows you to do this. You will be able to choose a $250,000 benefit level when you opt-out of PIP medical coverage.

Will Medicare Pay My Medical Expenses If I Get Injured in a Car Accident?

Yes, they well. However you will have to prove you currently have no other health coverage available to you. Under the new No-Fault reforms, Medicare will pay for medical bills that are related to the accident. Do note, however, that Medicare is entitled to a lien or reimbursement from any claim you may have against the negligent driver.

I Want To Keep My PIP Medical Benefits. Will Medicare Still Cover Medical Expenses?

If you decide to keep your unlimited lifetime PIP medical coverage, all accident-related medical expenses will be covered by the new No-Fault policy.

On the other hand, if you select limited coverage levels of $500,000 or $250,000, the No-Fault PIP benefits would cover accident-related medical costs until the coverage limits are reached.

What If I Have Medicare Plus Different Health Insurance Coverage?

If you are covered by a group health plan through your employer, the group plan is the primary payee if the employer has more than 20 employees. If it has less, then Medicare becomes the primary payor.

Additionally, Medicare becomes the primary payee if you are still covered by your employer’s group health plan after you retire.

How Are Medicare Services Different From Michigan’s No-Fault PIP coverage?

Unlimited lifetime PIP medical coverage pays for all necessary and reasonable accident-related expenses. As long as medical treatment is needed to ensure recovery, there are no limits on the duration of coverage.In contrast, Medicare only pays for specific and limited services. If a patient requires more rehabilitative or occupational therapy than Medicare allows, then the patient will have to pay for those additional sessions.

Below are some of the medical services that are not covered by Medicare:

In-home attendant care
Transportation to and from medical appointments
Nursing home care
Electric wheelchairs
Long-term custodial care
Specialized therapies for traumatic brain injuries (TBI)
Home and vehicle modifications for recovering patients

Medicare offers the following services on a limited basis:

Intermittent skilled nursing facility (SNF) care
Long-term rehabilitation therapy
Speech and language therapy

What Coverage Options Are Available to Medicaid Recipients?

Medicaid members in Michigan may go for PIP medical coverage with a $50,000 per person per accident limit. To qualify for this option, your spouse and any resident relatives must have their own qualified health coverage (private insurance or a separate No-Fault policy with PIP) that covers car accident injuries.

If you are not sure which Personal Injury Protection (PIP) medical benefits to choose, consider consulting with a knowledgeable insurance broker. And, if you or a loved one gets involved in a car accident, call us immediately. The Clark Law Office offers free legal consultations right in the comfort of your own home. Contact a lawyer today for inquiries.

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Matthew Clark

Content checked by Matthew Clark, personal injury attorney with The Clark Law Office. Matthew is the owner of The Clark Law Office and represents injury victims all over the State of Michigan. He has collected multiple million dollar verdicts and settlements for victims of auto accidents, dog bites, slip and fall, and medical malpractice. The main office is in Okemos, MI but you can also find us in Lansing and Eaton Rapids.