Health Coverage and the New Michigan Auto Insurance Reform Law

Traditionally, a person’s healthcare insurance coverage is there to help pay medical expenses such as doctor visits or hospital stays. In Michigan, for the past few decades, auto insurance policies were required to have unlimited Personal Injury Protection (PIP) coverage. That meant if a driver was hurt as a result of an auto accident, the cost of care, rehabilitation and recovery was covered under PIP Allowable Expenses — and the coverage was essentially unlimited. With the new auto insurance reform law going into effect in July, unlimited personal injury protection coverage is no longer required. While this new option will help reduce the cost of auto insurance for many who choose lower levels of PIP Allowable Expenses coverage, it also means that drivers may need to rely more on their personal healthcare insurance coverage if they’re hurt in an accident.

Qualified Health Coverage includes individual or employer-sponsored plans that fully cover auto-related injuries and have a deductible of $6,000 or less per person. You or members of your household who have Qualified Health Coverage may select an exclusion for PIP Allowable Expenses coverage. Check with your health insurance provider to see if your plan is eligible.

Medicare Parts A & B coverage also allows you to opt out of PIP Allowable Expenses but has additional eligibility criteria that applies to all other members of your household, while Medicaid coverage allows you to choose a special, low-cost, $50k coverage option. See the “What are my Personal Injury Protection coverage options” FAQ for more details.

There are some risks to consider with the new, lower Personal Injury Protection Allowable Expenses coverage options. The benefits offered for auto accident injuries under most healthcare insurance plans are not the same as PIP benefits. Some of the major risks include:

• Not having enough coverage, and in particular, in the event of a catastrophic auto injury.
• Unlike auto insurance, health insurance may stop paying when the policy ends or is cancelled.

One way to address these risks is to discuss your coverage with your healthcare insurance provider. You can also discuss the options available for you to select with your agent.

Before choosing new PIP Allowable Expenses (PIP AE) coverage limits, it’s important to ask your healthcare insurer the following questions:

• Do I have Qualified Health Coverage? Does my health plan restrict or limit auto injury coverage? What is my individual deductible? If I want to exclude PIP AE coverage under $250,000 option, my health insurance provider may need to provide proof of eligibility.
• How much coverage does my health insurance provide for injuries sustained in auto-related accidents?
• If I am catastrophically injured in a car accident, does my health plan cover attendant care? Most health plans may not cover attendant care coverage.

That depends. PIP Allowable Expenses (PIP AE) coverage is typically broader and more comprehensive than most health insurance plans for injuries sustained in an auto accident. PIP AE provides for medical expenses, attendant care, replacement services, and other benefits. Of course, there are many healthcare plans with many different coverage options. So, it’s important to speak to your auto insurance and health insurance providers for specific details on what’s covered, and what’s not, before choosing a new level of PIP AE coverage.