Auto Accident Medical Coverage In Michigan

In Michigan, health insurance covers car accident injuries, but there are some important exceptions and limitations. Generally, health insurance will pay out when a person has coordinated No-Fault auto insurance or when medical bills exceed a certain amount. However, some health plans exclude auto accidents and may not cover all necessary services included in No-Fault insurance. Since 2020, Michigan residents have been able to purchase varying levels of No-Fault insurance protection, or even opt out of medical coverage altogether if their health insurance plan covers auto injuries.

Michigan's auto insurance reform law

Key Changes:

• PIP Choice: Previously, Michigan law required all drivers to carry "unlimited" No-Fault medical coverage. Now, drivers must choose from one of four No-Fault PIP medical benefits coverage levels: $50,000 for drivers enrolled in Medicaid, $250,000, $500,000, or unlimited/no limit.
• Opt-out of No-Fault Medical Coverage: Drivers with Medicare can choose to opt out of No-Fault PIP medical benefits. However, if they are in an accident, No-Fault will not cover any accident-related medical bills, and they will need to rely on Medicare.
• Attendant Care Limits: Auto insurance companies are not obligated to pay for more than 56 hours per week for in-home, family-provided attendant care. This limitation does not apply to attendant care provided by a nurse from a commercial agency or in a residential facility.
• Michigan Catastrophic Claims Association (MCCA) Changes: The MCCA will continue to pay for the medical costs of catastrophically injured car accident victims claiming benefits through a No-Fault policy issued or renewed before July 2, 2020. For policies issued or renewed after July 1, 2020, the MCCA will only pay for unlimited No-Fault PIP medical benefits coverage was selected.
• Medicare-based Fee Schedule: Starting July 1, 2021, medical providers treating car accident victims must conform their charges to a new Medicare-based fee schedule.
• Bodily Injury Liability Coverage: Beginning July 2, 2020, drivers are required to carry bodily injury liability insurance of $250,000 and $500,000. However, they have the option to purchase lower limits of $50,000 and $100,000.
• Prohibited Factors for Setting Car Insurance Rates: Auto insurance companies are prohibited from using non-driving-related factors such as sex, marital status, home ownership, education level, occupation, postal zone, and credit score to set car insurance prices.
• Mini Tort Law Change: The maximum recovery amount for car accident-related vehicle damage under Michigan's mini tort law increased from $1,000 to $3,000 for accidents after July 1, 2020.

Impact on Health Insurance Coverage for Auto Accidents:

The reform has also impacted how health insurance interacts with auto insurance in covering car accident injuries. While health insurance generally covers car accident injuries in Michigan, some health plans exclude auto accidents and may not cover all necessary services provided by No-Fault insurance.

Drivers can "coordinate" their health insurance and No-Fault coverage, where health insurance pays first as the primary payer, and No-Fault coverage pays secondarily if health insurance coverage is exhausted or does not cover certain services. However, this coordination is not allowed if the driver's medical insurance is a self-funded ERISA plan provided by their employer with a coordination of benefits clause.

Additionally, the level of No-Fault PIP medical benefits coverage chosen will impact the extent to which health insurance covers car accident injuries. If a driver chooses unlimited coverage or $50,000 coverage as a Medicaid recipient, it is unlikely that health insurance will play a significant role.

It is important to note that health insurance and No-Fault insurance are not the same. Health insurance may exclude or limit coverage for certain treatments and services, such as attendant care, rehabilitation services, vehicle modifications, and long-term therapy.

In conclusion, while Michigan's auto insurance reform law offers drivers more choices and potentially lower costs, it is crucial for drivers and accident victims to understand their legal rights and make informed decisions about their coverage options to ensure they have adequate protection in the event of an accident.

When does health insurance cover auto accidents?

Health insurance covers auto accident injuries in Michigan, but there are some important conditions and limitations to be aware of.

Firstly, it depends on the type of coverage you have. If you have "uncoordinated" auto No-Fault coverage, then auto insurance will pay first. If you have "coordinated" coverage, then health insurance will pay first. With coordinated coverage, auto insurance will step in as the "secondary payer" if your health insurance coverage has been exhausted or if the services or treatment in question are not covered by your health insurance.

Secondly, it is important to note that some health plans exclude auto accidents and may not cover all the necessary services that would be covered by No-Fault insurance. Many health insurance plans have "auto accident exclusions" that specifically exclude coverage for injuries related to motor vehicle crashes. Additionally, there may be "secondary payer" clauses in health insurance plans that ensure they pay only on a "secondary" basis, after auto insurance has paid first.

Thirdly, the extent of coverage also depends on the No-Fault Personal Injury Protection (PIP) medical benefits coverage level in your auto insurance policy. Since 2020, Michigan drivers have been able to choose from different PIP coverage levels: unlimited, $250,000, $500,000, or $50,000 for drivers enrolled in Medicaid. If your medical bills exceed the $250,000 or $500,000 coverage levels, you may need to turn to your health insurance plan to cover the excess. However, if you have unlimited coverage, it is unlikely that your health insurance will need to pay for anything, unless your policy is coordinated, in which case it will be the primary payer.

In summary, while health insurance can cover auto accident injuries in Michigan, it is important to carefully review your health insurance and auto insurance policies to understand the extent and limitations of your coverage.

Who pays first: auto or health insurance?

In Michigan, drivers are required to purchase auto insurance to operate their vehicles on public roadways. Before July 1, 2020, auto insurance policies included lifetime unlimited medical coverage for the driver and their family members. However, recent auto no-fault reforms have made it possible for Michigan residents to purchase varying levels of no-fault insurance protection from their auto insurance carrier, or even opt out of medical coverage altogether.

In most cases, auto insurance is primary in an accident, meaning it pays first, and health insurance pays second. However, this depends on the insurance laws in your state and who is at fault for the accident.

If you live in a no-fault state, you must carry personal injury protection (PIP) coverage, which will be primary after a car accident. Your health insurance would be secondary to the PIP coverage. In a fault (tort) state, the fault in an accident does matter. If you are at fault, neither your policy nor the other driver's will cover your medical bills (unless you have chosen to add PIP or medical payments coverage). If you are not at fault, the other driver's liability insurance will cover your bills, but this can take some time, as determining fault can be a lengthy process.

In Michigan, drivers can choose one of the following medical coverage levels:

• Unlimited
• $250,000
• $500,000
• $50,000 for drivers enrolled in Medicaid

If you have "uncoordinated" auto No-Fault coverage, then auto insurance will pay first. If you have "coordinated" coverage, then health insurance will pay first.

In Michigan, health insurance plays a substantial role in covering car accident injuries for crash victims. The Michigan No-Fault law allows drivers to "coordinate" their health insurance and No-Fault coverage so that it pays first in the event of a car accident.

When might health insurance not cover auto accidents?

Health insurance usually covers car accident injuries, but there are some instances where it may not. Here are some scenarios where health insurance might not cover auto accidents:

• Auto Accident Exclusions: Many health insurance plans have "auto accident exclusions," which are provisions that specifically exclude coverage for injuries caused by motor vehicle accidents. Employers often add these exclusions to their employees' medical insurance policies to avoid higher insurance costs.
• Secondary Payer Provisions: Some health insurance plans have "secondary payer" clauses, which mean they will only pay on a "secondary" basis after the auto insurance has paid first. In these cases, the auto insurance is considered the "primary" payer.
• Coverage Limitations and Exclusions: Health insurance plans may have coverage limitations or exclusions that prevent them from covering all the necessary medical services and treatments related to car accidents. For example, they may not cover attendant care, rehabilitation services, vehicle modifications, or lost wages.
• Loss of Job: If an individual's health insurance is provided by their employer, and they are unable to return to work due to their injuries, losing their job could result in the termination of their health insurance coverage.
• ERISA Liens: In rare cases, if an ERISA (Employee Retirement Income Security Act) plan accidentally pays for an individual's medical care after a car accident, the plan administrators may use ERISA liens to force the individual to use any third-party compensation to reimburse the ERISA plan.
• Deductibles and Copays: Health insurance plans often require the policyholder to pay deductibles, copays, or other out-of-pocket expenses. These additional costs can add up quickly and may not be feasible for individuals with extensive medical bills after a car accident.
• Alternative Treatments: Certain types of alternative treatments or medicines may not be covered by health insurance plans, leaving individuals to pay out of pocket for these services.
• Out-of-Network Providers: Depending on the health insurance plan, there may be restrictions on in-network or out-of-network distinctions for care providers, limiting the options available to the policyholder.

What does health insurance do that No-Fault insurance doesn't?

In Michigan, health insurance covers car accident injuries. It pays when a person has coordinated No-Fault auto insurance or when medical bills exceed a certain dollar amount. However, some health plans exclude auto accidents and fail to cover all the necessary services covered by No-Fault insurance.

• Managed care: Many health insurance plans are managed care plans, meaning that victims do not have the right to choose their own doctors and are prohibited from undergoing prescribed treatments, procedures, or surgeries without written "pre-authorization" from the insurance company.
• Added costs: When health insurance covers car accident injuries, it often involves additional costs not imposed by No-Fault insurance, such as deductibles, copays, coinsurance, penalties for choosing out-of-network doctors, and other out-of-pocket expenses.
• Coverage limitations and exclusions: Health insurance plans may have coverage limitations and exclusions that prevent them from covering vital medical services and treatments for car accident injuries that are typically covered by No-Fault insurance.
• Auto accident exclusions: Many health insurance plans have "auto accident exclusions," which specifically exclude coverage for injuries related to motor vehicle crashes.
• Secondary payer provisions: Some health insurance plans have "secondary payer" clauses, which mean they will only pay on a "secondary" basis after No-Fault auto insurance has paid first.

It is important to note that No-Fault insurance, also known as Personal Injury Protection (PIP), covers medical expenses and loss of income when you are involved in a car accident, regardless of who was at fault. It is mandatory in some states and optional in others. No-Fault insurance is designed to reduce the demands on the court system by allowing lawsuits only for severe injuries or pain and suffering when damages meet certain thresholds.

Frequently asked questions