Can I Opt Out of Personal Injury Protection (PIP) If I Have Medicare?

Under the previous No-Fault insurance system, which was adopted in 1973, Medicare typically did not cover auto accidents in Michigan. In most cases, Medicare recipients who were injured in a crash were treated like any other motorist. This meant their accident-related medical expenses were covered under the Personal Injury Protection (PIP) portion of their Michigan No-Fault policy. 

However, as of July 1, 2020, these rules have changed. Previously, all motor vehicle owners were required to purchase No-Fault policies that included unlimited lifetime Personal Injury Protection (PIP) medical coverage. Now, as a result of extensive reforms passed last year by Michigan lawmakers, motorists can choose from six different levels of PIP benefits.

What’s more, individuals who are covered by Medicare Parts A and B can opt out of PIP medical coverage entirely providing certain conditions are met.

If you or a loved one is covered by Medicare, here’s what you should know about the new Michigan No-Fault laws. 

How does the new Michigan No-Fault law affect Personal Injury Protection (PIP) medical coverage? 

While the new laws encompass several areas of No-Fault, the most significant change is in the area of Personal Injury Protection (PIP) medical coverage. Instead of requiring all drivers to carry policies with unlimited lifetime PIP benefits, the new system offers a range of PIP medical coverage options.

The six options for Personal Injury Protection (PIP) medical coverage are as follows:

• Unlimited lifetime coverage (same as old No-Fault system)
• $500,000 PIP medical coverage limit
• $250,000 PIP medical coverage limit
• $250,000 limit with PIP medical exclusion (same as $0 PIP medical coverage offered to Medicare recipients)
• $50,000 limit (for Medicaid recipients only)
• $0 PIP medical coverage for those enrolled in Medicare Parts A and B

All No-Fault policy holders, including those on Medicare, can choose to retain their former unlimited PIP coverage, or they can choose one of the limited coverage options. 

What coverage options are available to Medicare recipients?  

A variety of medical coverage options are available to Medicare recipients under the new No-Fault law. They may keep their previous unlimited Personal Injury Protection (PIP) medical coverage. Or, they can choose one of the limited PIP medical coverage options of $500,000 or $250,000. Additionally, policy holders enrolled in Medicare Parts A and B can opt out of PIP medical coverage entirely. To opt out, the policy holder’s spouse and any resident relatives covered by the policy must have their own “qualified health coverage” that covers auto accident injuries. 

“Qualified health coverage” includes enrollment in both Medicare Parts A and B, or a health care plan that does not exclude or limit coverage for accident-related injuries. 

This can include private health insurance or a different Michigan No-Fault policy with PIP medical coverage. Furthermore, the annual individual deductible for the health care plan must be $6,000 or less.

Can I opt out of PIP Medical Coverage if I’m not on Medicare?

Yes, if you fulfill certain conditions. This option is also known as “Limited PIP Medical Coverage of $250,000 with Exclusions.” It allows policy holders who choose the $250,000 benefit level to opt out of PIP medical coverage for themselves, a spouse or resident relative. 

In addition, the excluded person(s) must have their own qualified health care coverage (excluding Medicare and Medicaid) that covers motor vehicle accident injuries. Anyone who is excluded will have no PIP medical coverage under the No-Fault policy.

Will Medicare pay my medical bills if I’m injured in an auto accident?

Yes, as long as you can prove that you have no other available health care coverage. 

In the past, Medicare was known as a “secondary payor.” Because medical bills related to auto accidents were covered under Michigan No-Fault, Medicare did not cover these expenses. And, if Medicare did pay such costs as the result of a billing error, they would generally seek reimbursement.

Nonetheless, under the new No-Fault law, Medicare will pay for accident-related medical services that are covered by Medicare. In addition, the injured person may be responsible for co-pays, deductibles and any services that Medicare does not cover.  It should be noted that Medicare is entitled to a lien, or reimbursement, from the proceeds of any claim you may have against the at-fault driver. 

Will Medicare cover my accident-related costs if I keep my Personal Injury Protection (PIP) medical benefits?

As stated earlier, Medicare recipients can choose to retain their unlimited lifetime Personal Injury Protection (PIP) medical coverage. Or, they can select one of the limited PIP coverage options of $500,000 or $250,000.

For those who continue their previous unlimited lifetime PIP medical coverage, all necessary accident-related medical expenses are covered by the No-Fault policy.  

The situation is a bit different for Medicare enrollees who select limited coverage levels of $500,000 or $250,000. In those instances, the No-Fault PIP benefits would cover accident-related medical bills until the coverage limits are reached. At that point, the No-Fault coverage would end and Medicare would become the primary payor.

What happens if I am covered by another health insurance plan in addition to Medicare?  

Some individuals over 65 may also be covered by a group health plan through their employer or that of their spouse. In that case, the group plan is the primary payor unless the employer has less than 20 employees. Then, Medicare becomes the primary payor.

For Medicare recipients with disabilities who are also covered by a large group health care plan, the group plan would pay first. However, if the employer has less than 100 employees, Medicare is the primary payor.

Additionally, for retirees who are still covered by their employer’s group health plan, Medicare is the primary payor.

Does Medicare cover the same services as Michigan No-Fault?   

No. However, the same is true for the majority of health insurance plans. Therefore it’s important to understand the differences between other health care coverage, including Medicare, and No-Fault PIP medical coverage before choosing one of the limited PIP medical options. 

Unlimited lifetime Personal Injury Protection (PIP) medical coverage pays for all reasonable and necessary accident-related expenses. As long as the services are needed to promote recovery, there are no limits on the duration of treatment. 

In contrast, Medicare only pays for specific services, and there are limitations on many of these, such as rehabilitative therapy. If a patient requires more physical or occupational therapy than Medicare allows, the patient could be responsible for the additional sessions.   

Also, like most other health care plans, Medicare does not provide the same kind of coverage for many services that are covered under No-Fault policies with unlimited Personal Injury Protection (PIP) medical benefits. And, most services covered by Medicare are subject to co-payments and deductibles. 

Here are some examples of services that are not covered by Medicare (and most health insurance policies):

• In-home attendant care
• Transportation to and from medical appointments
• Long-term custodial care
• Nursing homes
• Electric wheelchairs
• Certain specialized therapies for traumatic brain injuries
• Home and vehicle modifications

The following services are covered by Medicare on a limited basis:

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

What are the PIP Medical coverage options for Medicaid recipients?

Michigan residents who are enrolled in Medicaid can choose PIP medical coverage with a $50,000 per person per accident limit.

To qualify for this option, the policy holder’s spouse and resident relatives must have their own qualified health care coverage that covers auto accident injuries. This coverage can be provided by Medicaid, private insurance or a separate No-Fault policy that includes PIP medical coverage. 

If you are unsure of which Personal Injury Protection (PIP) medical benefits are right for you and your family, consult a knowledgeable insurance agent. 

And, if you or a loved one is injured in an accident, call us. Our experienced and compassionate legal team is ready to fight for your rights to the compensation you deserve. 

Michigan No-Fault law is complicated, but finding the right accident lawyer is simple.

Call 1-800-CALL-SAM today for a free, no-obligation remote consultation from the safety of your home.