One of the key changes coming from Michigan’s no-fault auto insurance policy reform is your ability to select coverage options when it comes to Personal Injury Protection (PIP). We’ve been talking a lot about Michigan’s no-fault auto insurance reform on our blog, and here’s a quick refresher on what PIP is:
PIP medical coverage offers auto insurance policy holders coverage for medical, recovery, rehabilitation and in some cases funeral expenses if a policyholder is involved in an auto accident. The new coverage limits will meet or exceed the highest benefits in the country while also allow driver the option to choose coverage options that fit their need/budget.
No-Fault law went into effect in 1973 and was considered a model for motor injury cases because it guaranteed all motor vehicle accident victims uncapped medical expense coverage regardless of who was at fault in the accident. Under the new no-fault reform in Michigan, drivers no longer have a guaranteed lifetime coverage medical expenses unless they purchase that coverage.
While it might sound like a good thing that you can now select the amount of PIP medical coverage you would like, the risk of being under-covered can be financially devastating, especially for Medicaid/Medicare participants. Additionally, there is some misconception around how Medicaid/Medicare covers personal injuries vs. PIP, and it is very important you understand how the two compare.
The important thing all drivers need to understand is what traditional Medicaid/Medicare benefits cover should you injured in an accident. The team at CPAN offered a great comparison of unlimited no-fault versus Medicaid and Medicare in a chart that you can find here. Here are some of the highlights from CPAN’s analysis.
Medicare
While all of the following are covered under unlimited no-fault coverage, here’s a look at some of the key coverage benefits that are NOT included with traditional Medicare should you be seriously injured in an auto accident:
- Long-Term Care & Custodial Care
- Residential Treatment Programs
- Case Management Service
- Guardianship or Conservators
- Transportation Services
- Replacement Services (Homemaker Services, Personal Care, Meal Assistance, etc.)
- Massage Therapy
- Vehicle Modifications (Accommodations for Wheelchairs, Hand Controls, etc.)
- Specialty Assistive Devices (Computers, Communication Devices, Fitness Equipment)
- Wage Loss
Medicaid
While the following are covered under unlimited no-fault coverage, here’s a look at some of the key coverage benefits that are NOT included with traditional Medicaid should you be seriously injured in an auto accident:
- Massage Therapy
- Alternative Pain Management (Acupuncture, etc.)
- Specialty Assistive Devices (Computers, Communication Devices, Fitness Equipment)
- Wage Loss
While Medicaid does offer more coverage opportunities, they are still much more limited than the unlimited PIP coverage option. For example, unlimited PIP covers post-acute care and skill nursing treatment at 100% for as long as needed. On the other hand, Medicaid participants must meet a specific Level of Care (LOC) requirement to qualify for skilled nursing coverage.
Another example would be transportation services. While transportation services are potentially available to Medicaid participants, you must meet program criteria, meaning some will not qualify for this coverage under traditional Medicaid. On the other hand, transportation services are included with the unlimited no-fault coverage option on your auto insurance.
Conclusion
Everyone needs to take the time to understand how the no-fault auto reform is changing your existing policy and your policy options moving forward. For those that are on Medicare/Medicaid, it is critical that you understand how these programs cover your medical costs should you be severely injured in an accident. The worst thing you could do is elect for the lowest PIP coverage simply to save a few dollars on your policy. You need to find the best coverage options for you, so you can rest easy knowing you and your loved ones will be taken care of.
