Dramatic changes are taking effect as we speak in our auto insurance system in Michigan. With no-fault reform signed into law in 2019, and consumer no-fault PIP level options becoming available this month, we’ve discussed the auto coverage recommendations we suggest everyone seriously consider purchasing. We haven’t, however, spent a lot of time discussing the groups who could potentially opt-out of no-fault coverage altogether, and what the consequences of doing so could entail. If you’re a Medicare or Medicaid recipient and are considering opting out of no-fault PIP coverage, we encourage you to read on to understand which rights and services you could lose by doing so.
Medicare Recipients and the Auto No-Fault Opt-Out Option
Seniors can now opt-out of no-fault PIP expense benefits if they:
- are covered under both Parts A and B of Medicare; and
- their spouse and any resident relative has Medicare “qualified health coverage” or has coverage under a separate no-fault policy.
Furthermore, Medicare recipients injured in a motor vehicle accident who opt-out of no-fault PIP benefits will not be able to receive any no-fault coverage through the Assigned Claims Plan. However, they may be entitled to ACP coverage if injured in a collision as a non-occupant or pedestrian, subject to the ACP cap of $250,000.
Does Medicare Cover Auto Injuries Under the New Law?
The Coalition Protecting Auto No-Fault (CPAN) has created a tremendous document that compares and contrasts the difference between no-fault and Medicare coverage regarding the care, recovery, and rehabilitation of people with auto accident-related injuries. It’s absolutely vital you understand which services and specialties are not covered under Medicare, or are covered only up to a certain limit, before opting out of PIP coverage.
Please visit CPAN’s website to view and download this valuable, free PDF. You can also go to ShopYourPolicyMI.com about shopping your auto insurance policy under the new law.
Medicaid Recipients and the $50,000 PIP Option
Under the new auto no-fault law, recipients of Medicaid can select a $50,000 PIP medical expense option. This option is only available if:
- the named insured is enrolled in Medicaid; and
- their spouse and resident-relatives are also covered under Medicaid, are covered under a qualified health insurance plan, or have PIP coverage under a separate auto insurance policy.
Does Medicaid Cover Auto Accident Injuries Under the New Law?
If you are considering opting for this level of PIP coverage, it is absolutely crucial you first understand which services are not available through Medicaid but may be needed in the event of an auto accident. Again, CPAN has created a remarkable brochure for consumers to compare coverages.
Should I Opt-Out of PIP Coverage?
If you’re still wondering “should I opt-out of PIP coverage” we strongly advise against doing so. Medicare and Medicaid both offer very limited services in terms of the scope of care available for people seriously injured in motor vehicle accidents. Michigan’s unlimited, lifetime auto no-fault system is still the most robust coverage in the event of an accident. In fact, for best protection for you and your family, we recommend purchasing the following insurance coverages:
1. Unlimited, lifetime no-fault coverage
2. Significant amounts of liability coverage
3. Significant amounts of underinsured and uninsured motorist coverages
4. Avoid managed care plans
5. Avoid step-down policies
Read our recent article outlining each of these coverages and why they’re so important here: Sinas Dramis auto insurance coverage recommendations under the new no-fault law.