How Medicaid and Medicare Can Impact Coverage Options Following a Car Accident
Michigan’s new No-Fault Law changed how individuals can manage their medical expenses if injured as a result of an auto accident.
Michigan State law now allows consumers to opt-out of medical expenses when selecting their auto insurance policy as a way to potentially save on premiums. Yet that may not be the best strategy. That’s because those policyholders who opt-out eliminate the ability to be covered for medical expenses under their auto insurance policies.
Many healthcare policies may not even cover the cost of medical bills that accrue from a specific automobile injury. If your insurance does cover such bills one year, it is possible that your premiums may increase exponentially the following year. Or you may find it difficult to obtain coverage from multiple health insurers, putting your finances at risk.
It is common for our clients to be confused about the role Medicaid and Medicare plays in helping to cover the costs associated with injuries suffered from an auto accident. Some answers are below.
Does Medicare cover auto accident injuries in Michigan?
Simply put, Medicare will usually cover the cost of some medical needs for injuries that are the result of an auto accident in Michigan. However, coverage may not be full. Unlike the typical No-Fault auto insurance policy, Medicare will require reimbursement and thus will not cover all the critical medical services that may be required for a victim to fully recover, such as extended physical therapy or behavioral consulting.
There are several PIP medical coverage options under state law:
- Unlimited
- Up to $500,000 in coverage
- Up to $250,000 in coverage
- Up to $50,000 in coverage and
- A complete opt-out as mentioned above.
There is also an option for up to $250,000 in coverage with PIP medical exclusions.
It should be noted that the $50,000 coverage is available only if the insured is enrolled in Medicaid and their household members have another auto insurance policy. The opt-out option is available if the insured party has Medicare (Parts A and B). Any other household members must have their own auto insurance coverage in that scenario.
When the law was first passed earlier in 2020, the Michigan Insurance Commissioner indicated that Medicare will pay for Medicare-covered services even for enrollees who opt out of PIP medical benefits. If a person in this scenario is injured in an auto accident, Medicare will step in if there is no other coverage available.
According to the state’s insurance commissioner, “If a Medicare enrollee is injured in an accident and exhausts his or her PIP medical limits and has no other available coverage, Medicare will pay for Medicare-covered services.” Since not all medical services needed following an auto accident are covered, an expensive out-of-pocket gap may still exist.
So, the answer is that Medicare does cover some medical bills for injuries suffered because of an auto accident in Michigan, but there are qualifications.
Does Medicaid cover auto accident injuries in Michigan?
Medicaid, which provides health coverage to low-income families and individuals and many suffering from disabilities, is typically not tapped to pay for auto accidents in Michigan but there are rare cases where Medicaid does provide coverage.
One example is for those who choose a No-Fault medical benefits coverage level between $50,000 and $500,000. When coverage is extended, the reimbursement is likely to be drawn from the injured person’s Medicaid. Under the state’s existing No-Fault law, individuals who choose the unlimited PIP option are unlikely to ever see their Medicaid impacted. Those with other PIP coverage limits might experience coverage specifics.
In addition, once a car accident victim’s medical bills reach his or her No-Fault PIP medical benefits coverage limit and No-Fault coverage ends, the law presumes Medicaid may serve as a resource for ongoing medical care.
One other factor to consider is that if Medicaid covers auto accident injuries for accident-related medical bills that No-Fault insurance had the “legal liability” to pay, reimbursement through a lien may be sought.
How do the rules for Medicare coverage of auto accidents in Michigan affect me?
Medicare covers auto accident-related injuries in a different way under the current Michigan law as opposed to before July 2020. As a reminder, Medicare is federal health insurance for people 65 or older, some younger people with disabilities and for citizens in other special circumstances as defined by law.
Medicare’s role in the No-Fault law makes the decision of what level of No-Fault PIP coverage you choose a very important one. When the auto accident attorneys at Kajy Law are asked whether Medicare covers auto accidents in Michigan, we often say that it depends on the coverage they choose.
For example, you should be aware that there are a number of important medical services and types of medical care that are important to help car accident victims recover from their injuries that would be covered by No-Fault – but usually not Medicare. These examples include a range of ongoing medical treatment that may be required over the long-term, and other associated costs, including:
- Ongoing rehabilitation
- Occupational therapy
- In-home care
- Transportation to and from health care visits
- Case management
- Nursing facility care
- Residential treatment programs
- Certain types of medical equipment such as electric wheelchairs
To be clear, Medicare provides limited coverage for initial medical bills arising from auto-accident-related injuries such as surgeries. But if you choose a low amount of PIP coverage, or opt-out altogether, the amount of available coverage may fall well short of what is needed to pay for all the medical bills.
Kajy Law can answer any questions you may have
The law is complex and can be difficult to understand. This is especially frustrating to motorists who have recently been injured in an auto accident because of the physical pain and mental stress they are under.
If you have questions about where Medicare or Medicaid can cover the cost associated with your injury following an auto accident in Michigan, Lawrence Kajy and the team of experienced professionals at Kajy Law can walk you through every scenario. We won’t let the insurance companies take advantage of your situation. Contact us for a free consultation.