Auto Insurance For Seniors in Michigan: What You Need To Know
If you’re a senior on Medicare in Michigan, you have the option to opt out of No-Fault Personal Injury Protection (PIP) medical coverage on your auto insurance, potentially lowering your premium (MCL 500.3107d(1)). But this option comes with serious trade-offs: Medicare and private health insurance typically will not cover many of the most important medical services available through No-Fault PIP, and Medicare has the legal right to seek reimbursement from your car accident settlement for any medical bills it pays.
Michigan’s No-Fault insurance law could leave older drivers without access to needed medical care after a car accident if they choose the Medicare/opt-out option, since No-Fault insurance medical coverage and Medicare cover very different things.
Many older drivers are asking anxious questions about auto insurance for seniors in Michigan. They want to know about the Medicare/opt-out option which allows drivers on Medicare to opt out of No-Fault PIP medical benefits coverage altogether. Their interest in this Medicare/opt-out option is understandable, driven as it is by politicians’ promises of savings.
But those promises of savings on auto insurance for seniors in Michigan come with some very ominous dangers. The reality is that older drivers who choose the Medicare/opt-out option will jeopardize their own and their families’ ability to get necessary medical care and treatment after a car accident.
Key Things Michigan Seniors Should Know About Auto Insurance And The Medicare PIP Opt-Out
- Eligibility: You can only choose the Medicare/opt-out if you have Medicare Parts A and B, and your spouse or any family member living with you has their own qualified health coverage or No-Fault policy (MCL 500.3107d(1), (7)(b)(ii), (7)(c)).
- Limited savings: Opting out only eliminates the No-Fault medical coverage and Michigan Catastrophic Claims Association assessment portion of your premium (MCL 500.2111f(3); 500.3104(7)(d)), which our attorneys consider a relatively small piece of the overall bill.
- Medicare lien exposure: If Medicare pays for your car accident medical bills, it generally has the legal right to be reimbursed out of your settlement or jury verdict (42 U.S. Code § 1395y(b)(2)(A)(ii); 42 CFR Part 411.50(c)(1)), meaning the “savings” can be offset later, sometimes substantially.
- Coverage gaps: Medicare does not cover, or only covers with very restrictive limits, several services that No-Fault PIP would otherwise pay for in full, including in-home attendant care, long-term rehabilitation, vehicle and home modifications, and post-traumatic brain injury therapy.
To learn more, check out the video below of Michigan Auto Law attorney Brandon Hewitt’s interview on WZZM-13 TV in Grand Rapids:
Recommendations For Auto Insurance For Seniors In Michigan
When it comes to auto insurance for seniors in Michigan, our attorneys make these recommendations for coverage under the No-Fault law.
We believe that all drivers – whether they’re first-timers who just got their driver’s license or elderly drivers who’ve been driving for decades – should choose the No-Fault PIP option with unlimited medical benefits (and no Managed Care Option).
What No-Fault Auto Insurance PIP Coverage Options Do Seniors Have In Michigan?
The auto insurance options for seniors in Michigan for medical coverage after a car accident are the same that all drivers have under Michigan’s No-Fault law.
Specifically, a driver will choose one of the following No-Fault PIP medical benefits coverage levels which determine how much medical care will be covered after a car accident: $50,000 for drivers on Medicaid; $250,000; $500,000; unlimited; and an opt-out for drivers on Medicare.
Who Qualifies For The Medicare PIP Opt-Out In Michigan?
If a driver has Medicare, he or she can opt out of No-Fault PIP benefits by “elect[ing] to not maintain coverage for personal protection insurance benefits” to cover medical bills after a car accident. (MCL 500.3107d(1))
In doing so, the driver is choosing to give up his or her rights to No-Fault medical coverage of car accident-related medical bills and presumably will rely on Medicare (or another payment source) for medical coverage.
Importantly, a driver can choose the Medicare/opt-out only if the following conditions exist:
- The driver has Medicare Parts A and B (MCL 500.3107d(1) and (7)(b)(ii) and (7)(c))
- The driver’s spouse or family member living with the driver has “qualified health coverage” (in the form of coverage for car accident-related medical care through a private plan or Medicare) or has his or her own No-Fault policy. (MCL 500.3107d(1))
Importantly, to qualify as “qualified health coverage,” a person’s “health or accident coverage” must be such that it “does not exclude or limit coverage for injuries related to motor vehicle accidents” and its “annual deductible for coverage” must be “$6,000 or less per individual.” (MCL 500.3107d(7)(b)(i))
What Does Medicare Not Cover That No-Fault PIP Would After A Car Accident?
In regards to auto insurance for seniors in Michigan it is important for older drivers to understand the difference between what No-Fault medical coverage and Medicare will cover for people who have been injured in a car accident.
Subject to the No-Fault PIP medical benefits coverage levels in the policy through which a car accident victim is claiming medical coverage, PIP benefits will cover all car accident-related medical care that is “reasonably necessary” to a victim’s care, recovery or rehabilitation. (MCL 500.3107(1)(a))
By contrast, the following medical services that are vital to a victim’s recovery are either not covered or subject to very restrictive coverage limitations by Medicare:
- In-home attendant care
- In-home, family-provided attendant care
- Post-acute care/sub-acute rehabilitation
- Long-term comprehensive rehabilitation
- Residential treatment programs
- Case management services
- Transportation to and from medical appointments
- Vehicle modifications
- Home modifications
- Physical therapy
- Occupational therapy
- Durable medical equipment
- Electric wheelchairs
- Specialty assistive devices
- Pain management
- Executive functioning therapy for post-traumatic brain injuries
How Do Medicare Liens Affect A Senior’s Car Accident Settlement In Michigan?
When it comes to auto insurance for seniors, Medicare liens directly reduce the amount of money a senior keeps from a car accident settlement. If Medicare pays for car accident-related medical bills, the senior generally must reimburse Medicare out of any settlement or jury verdict later recovered from the at-fault driver, meaning the victim effectively ends up paying for his or her own medical bills.
Medicare secures this reimbursement by filing a Medicare lien against any settlement or judgment the car accident victim obtains, as it does now. Medicare has the legal right to do this under the federal Medicare Secondary Payer rule, which says Medicare cannot be made the primary payer on car accident-related medical bills when payment “can reasonably be expected to be made… under an automobile… insurance policy… or under no-fault insurance.” (42 U.S. Code § 1395y(b)(2)(A)(ii); 42 CFR Part 411.50(c)(1))
I know Michigan’s Insurance Commissioner in Bulletin 2020-05-INS has assured us that “Medicare will pay for Medicare-covered services to enrollees who opt out of PIP medical benefits, are injured in an automobile accident, and have no other available coverage.”
But as a car accident attorney who has dealt with many Medicare liens over the last two decades, I also know that Medicare takes its Congressionally-enacted “Medicare Secondary Payer” powers very seriously and that Medicare has always aggressively sought reimbursement for “conditional payments” made when No-Fault coverage should have been paying.
Does The Medicare PIP Opt-Out Actually Save Michigan Seniors Money On Auto Insurance?
If a senior driver chooses the Medicare/opt-out, he or she will no longer have to pay for No-Fault medical coverage on their auto insurance or the full Michigan Catastrophic Claims Association assessment. (MCL 500.2111f(3); 500.3104(7)(d)).
So, the short answer is yes, there are savings from Michigan’s auto insurance for seniors.
However, any older driver who chooses Medicare/opt-out for savings should keep these warnings in mind:
- In return for giving up all No-Fault medical coverage and catastrophic injury coverage to protect themselves or their families if they’re injured in a car accident, drivers would only see negligible savings on the portion of their bill that applies to No-Fault personal protection insurance.
- Reductions in No-Fault medical premiums may be offset by increases in premiums for bodily injury liability insurance.
- Reductions in No-Fault medical premiums may be offset by overall increases in premiums based on a company’s use of “territories” and credit-based information in its rate-setting process.
- Any savings that an older driver may enjoy as a result of reductions in No-Fault medical premiums will likely be offset later by Medicare liens that take money out of a car accident victim’s settlement for pain and suffering compensation and/or “excess” medical bills.
Can Michigan Seniors Waive No-Fault Wage Loss Coverage On Their Auto Insurance?
If you are over 60 years of age (senior) and retired or otherwise not working and, thus, not eligible for No-Fault wage loss benefits on your auto insurance if you’re injured in a car accident, then you can “waive coverage for work loss benefits.” (MCL 500.3107(2)(a))
In return for your waiver of No-Fault wage loss coverage, your company “shall offer” you “a reduced premium rate.”
Are You A Senior Injured In An Auto Accident Who Doesn’t Understand Your Insurance Coverage And Needs A Lawyer? Call Our Attorneys Now For A Free Consultation!
If you are a senior who was injured in a car accident in Michigan and are wondering how your auto insurance policy will impact your claim, call now (800) 968-1001 for a free consultation with an experienced car accident lawyer. There is no cost or obligation. You can also visit our contact page or use the chat feature on our website.
Michigan Auto Law is Michigan’s largest and most successful law firm that specializes exclusively in helping people who have been injured in auto accidents.
Our secret? Our attorneys deliberately handle fewer cases than other personal injury law firms. This allows us to focus more time and attention on our cases.
Unlike other law firms, our attorneys are never too busy to promptly return phone calls and answer questions.
We have more than 3,000 5-Star reviews that reflect this care and attention to detail.
More importantly, this client-focused approach leads to better and faster settlements for our clients. Michigan Auto Law has recovered more million-dollar settlements and trial verdicts for motor vehicle accidents than any other lawyer or law firm in Michigan. We’ve also recovered the highest ever reported truck accident and car accident settlement in the state.
Call now so we can start making a real difference for you.
Written By
Steve M. Gursten,
Attorney,
License#: P53632
Steven Gursten, attorney at Michigan Auto Law and one of the most successful auto accident attorneys in Michigan. Michigan Auto Law represents people seriously injured in car, truck, motorcycle, and bus accidents, including catastrophic injury, traumatic brain injury, and No-Fault insurance cases. Steven has recovered the largest reported auto and truck accident settlement of any Michigan lawyer, and has been named Michigan Lawyer of the Year and a Top 50 Michigan Super Lawyer.
Read Steven Gursten’s full attorney profileLegally Reviewed by Todd Berg, Attorney
This article is for informational purposes only and does not constitute legal advice. See our Community Guidelines.