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Your PIP Decision, Part 2

To legally drive our vehicles in Michigan, our state government wants us to be part of a medical system that pays for our auto accident medical costs.  Our auto policy’s Personal Injury Protection (PIP) puts us in a state-created system tailor made to pay for auto accident medical costs.  However, the costs for PIP and its fees can add up.  This article opens the discussion to lowering our auto insurance costs by opting out of PIP and allowing other medical systems such as Medicare and Medicaid to work in place of PIP.  Our last article covered PIP options for those not on Medicare or Medicaid.

However, not everyone on Medicare and Medicaid can opt out of PIP because this decision impacts all resident relatives covered by the auto policy.  If the named insureds on the auto policy are on the same program, such as a husband and wife both on Medicare, opting out of PIP is allowed. If there are also resident relatives who aren’t enrolled in Medicare or Medicaid, or any other plan, then PIP needs to remain on the auto policy to protect the household.  When there are multiple medical health plans in a household, extra care needs to be taken to understand how things fit together.

From a coverage standpoint, PIP usually does better at paying for auto accident medical costs than Medicare or Medicaid.  An example of this:  with the option to drop PIP in favor of Medicaid, the auto policy still provides $50,000 in PIP medical coverage that could address costs Medicaid won’t cover.  

Comparing what PIP pays for vs. what Medicare pays for can be interesting.  Many people on Medicare have extra/supplemental policies to improve upon the base plan’s benefits.  There is a ton of variety here.  Some “classic” coverage items to look for in your supplemental policies include long term care, residential treatment programs, attendant care, various types of therapy, and alternative pain management.  PIP provides coverage for these things, and they can be incredibly expensive.

This is an important conversation between you, your auto insurance agent, and your health insurance agent.  Get some coffee, a pad and pen, take good notes, and make a good decision!