Why Medicare and Medicaid should NOT pay for medical care after an auto accident
I recently received a common question from a senior citizen who was injured in an auto accident and left confused on who should pay. It’s a common issue, and it becomes a problem with many doctor offices who want to bill Medicare (wrongly) to get paid faster or medical billers who are confused on the interplay between Medicare, Medicaid and medical expenses for a Michigan car accident victim:
Q. I’m a new resident of Michigan. I am retired and moved here to be close to my grandchildren. Why is the State of Michigan allowed to (charge) senior citizens so much money? We pay for Medicare insurance, as you will know, they do not cover all medical expenses, so we have to buy additional insurance to cover all expenses plus, pay for a prescription plan. Then the state requires anybody over 65 to pay an additional $125 in medical coverage in case we are hurt in an automobile accident. That’s a total of $450 that I pay for medical care on a limited income.
A. Dear reader,
By law, Medicare and Medicaid are payers of last resort. This means that if you have any other type of insurance coverage for your injuries, such as auto no fault insurance (since we are talking about who pays after an auto accident), your no fault auto insurance has highest priority to cover your medical expenses first.
Any motor vehicle is required by law to carry Michigan No-Fault Auto insurance.
If you only pay for coordinated (secondary) coverage on your auto insurance policy, which is by the way less expensive for you, then your auto insurer will ultimately be paying your medical expenses on a primary priority basis, due to Medicare and/or Medicaid being payers of last resort only.
Because you should have paid the higher premium for the primary auto coverage, your insurer will charge you a penalty medical deductible. Some auto insurers have been known to charge as much as $2,500, although generally it is an additional $300 or $500. This will most likely be more than the increased amount to have the correct coverage.
Yes, this is all costly. But there is a huge upside here that people in other states do not have. Keep in mind that you are now comprehensively covered with your Medicare and auto no fault insurance. Medicare is not supposed to cover auto accident related injuries.
The Michigan No-Fault insurance coverage that you have means you can see any specialist and have any type of test that your doctors think is reasonably necessary for your recovery. It covers your medical care and if necessary attendant care (nursing services) after an auto accident for a lifetime if you’ve suffered very serious injury.
And the biggest benefit? You do not face the possibility of financial ruin, the loss of a lifetime of savings, and the very real problem of catastrophic car accident victims in many other states face. These people have very limited choices on brain injury and spinal injury rehabilitation where there is no no fault insurance, or very minimum limits, and the medical facilities must only recover from Medicare and Medicaid.
For more information, click here to read a comprehensive analysis of Michigan No Fault reform and the latest developments.