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I’m on Medicare/Medicaid and injured in a Michigan auto accident, who pays my medical bills?

March 11, 2014 by Steven M. Gursten

Important: Why Medicare and Medicaid should NOT pay for your accident-related medical care

When people have multiple sources of insurance – like Medicare, Medicaid and private health insurance – who pays for medical care can be quite a confusing issue. Compound that with medical care after an auto accident, which involves Michigan No Fault insurance, and things can get more complicated.

Compound that again with the tendency of many doctors and medical billers to just send the bill to Medicare or Medicaid because they want to get paid quickly (even though medical reimbursement is lower than under No Fault) and things can get downright hairy.

Recently, I received a common question from a senior citizen on Medicare who was hurt in a car accident and unsure about which insurer should cover all of her medical bills. I’ve included her question and my answer below:

Q. I am a retired senior citizen in Michigan. I pay for Medicare insurance, but as you know, it does not cover all medical expenses, so I have to buy additional insurance to cover all expenses and pay for a prescription plan. Then the state requires anybody over 65 to pay an additional $125 in medical coverage for No Fault insurance, in case we are hurt in an automobile accident. So who pays for my medical care after my car accident?
A. This is a common issue, and becomes a problem with many doctor offices that incorrectly bill Medicare so they can receive quicker payment. Also, medical billers often get confused on the interplay between Medicare, Medicaid and No Fault medical expense reimbursement for an auto accident victim in Michigan.

To start, Medicare is not supposed to cover auto accident-related injuries. This is because by law, Medicare and Medicaid are payers of last resort.

If you have any other type of insurance coverage for your car accident injuries, such as Michigan No Fault insurance, your No Fault insurance would cover your medical expenses first. By law, Michigan drivers are required to carry Michigan No-Fault auto insurance.

If you only pay for coordinated (secondary) coverage on your No Fault auto insurance policy, which is less expensive, then your auto insurer will ultimately be paying your medical expenses on a primary priority basis.

Because you did not pay the higher premium for the primary auto coverage, your auto insurance company may charge you a penalty medical deductible. Some have been known to charge as much as $2,500, although generally, it’s an additional $300-$500. This penalty charge will most likely be more than the increased amount to have the correct coverage.

Yes, this can be costly. But there’s an immense upside than most people never realize. In fact, I often say to people that no one wants to be hurt in a car accident, but if you have been, you want it to be in Michigan. This is because people in this state have legal rights and protections under No Fault that people in other states do not. Having both Michigan No Fault and Medicare, you are and will be comprehensively covered.

The Michigan No Fault insurance coverage that you have means that all of your auto accident-related medical expenses are covered. You can see any medical specialist and have any type of diagnostic test that your doctors think is reasonably necessary for your recovery. As of now, Michigan No Fault covers your medical care and if necessary, attendant care (in-home nursing services) after an auto accident for the entire duration of your injury, even when people are catastrophically injured and require lifetime attendant care and medical care.

And the biggest benefit? You do not face the possibility of financial ruin, the loss of a lifetime of savings, and a dramatic drop in the quality of medical care so you can make a good recovery. These are real problems for catastrophic car accident injury victims in many other states. These people have very limited choices on traumatic brain injury and spinal cord injury rehabilitation centers where the state either doesn’t have No Fault insurance, or has very minimum limits, and the medical facilities must only recover from Medicare and Medicaid. It can dramatically alter the treatment that people receive.

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