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No-Fault Reform and Medicare

By April 22, 2020June 12th, 2020No Fault Auto Reform, Personal Insurance
Medicare and No-Fault Reform

No-Fault Reform is giving people on Medicare the option to opt-out of Personal Injury Protection (PIP) on their auto policy.  If you are a “named insured” and you’re on Medicare, then Medicare is ready to pay for your medical costs from injuries caused by an auto accident.  The big question is, “Do you really want this?”

Your auto policy’s PIP covers the real-life expenses you would incur from a serious auto accident.  It doesn’t stop paying if your auto policy cancels. There are no deductibles, co-pays, or out of network charges.  Sounds pretty good right?! When comparing PIP to Medicare, it’s not even close when it comes to getting your medical costs paid from an auto accident. Compare PIP vs Medicare. Unlimited PIP is still the best way to know that you and your family will get the medical care you need. So let’s look at your options.

No-Fault PIP Options and People on Medicare

Option 1 – Unlimited PIP Medical

You can still get unlimited PIP like you used to get.  Just because you have Medicare doesn’t mean you have to use it for auto accident injuries.

Option 2 and 3 – Limited PIP Medical

PIP Option 2’s limit of $500,000 and PIP Option 3’s limit of $250,000 will stop paying when that limit is reached.  Medicare will then begin paying expenses after your PIP limit has been exhausted.

If you select PIP Option 2 or PIP Option 3 you can purchase up to $100,000 (depending on your insurance company) in “Attendant Care.” This will pay for your care if you are unable to take care of yourself due to injuries you’ve sustained from an auto accident.  Unlimited PIP will pay for these expenses as long as you need them.

Option 6 – Medicare PIP Opt-out

The “Medicare opt-out” provides no PIP Medical coverage.  In order to be eligible for this option, you (the named insured) must:

  • Be enrolled in Medicare Parts A & B
  • Your spouse or the resident relatives of you or your spouse must have a *Qualified Health Plan (QHP), Medicare or PIP coverage from another auto policy

*A qualified health plan is one that is willing to pay for medical costs from auto accidents and has a deductible of $6,000 per person or lower.

If the criteria for the above two rules aren’t met, you aren’t eligible for this option

Selecting from PIP Medical Options 1, 2, 3 and 6

Option 1 — Unlimited PIP, gives you the lowest risk of being personally responsible for huge medical costs if you are seriously injured in an auto accident.  Options 2, 3 and 6 can put you in a position of having to pay for your own medical care, although they may save you money now on PIP coverage.  Option 6 removes your charges for PIP Medical and the Michigan Catastrophic Claims Association (MCCA) fee.  While this might sound like a good idea today, what if down the road you’re seriously injured in an auto accident?  You probably won’t look back so fondly on the day you chose to go with Option 6!  Remember that opting out of PIP and relying solely on Medicare causes you to lose out on access to long-term care, residential treatment programs, vehicle and home modifications, and more.

If you have a Medicare Supplemental policy, to make a good decision here you’ll need to find out how it responds to medical costs from auto accidents and compare it to PIP Medical coverages.

Our Recommendation on No-Fault Reform and Medicare?

Unlimited PIP is always your best option.  If you could afford Unlimited PIP before No-Fault Auto Reform, there’s a good chance you can still afford it after July 2, 2020.  Simply put, Unlimited PIP is one of the best insurance options when it comes time to pay claims for auto accident injuries. We are here to talk through these coverage options with you – call us today.


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