Which PIP medical coverage is right for Medicare recipients?
By Hastings Mutual Insurance Company
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My father is retired but he’s not just sitting around. He’s on his computer every day, paying attention to the world around him — finance, the news, all the things he’s interested in. My mother is paying attention too, and checks in with her Facebook friends, including me, almost every day.
They live in Michigan, so they have heard the news about no-fault reform and that the laws for auto insurance are changing on July 2, 2020. But they’re not sure what that means for them. They have heard that since they have Medicare, they may be able to opt out of some coverage and save a lot of money. But it seems like a complex topic with a lot of different parts. Some parts matter to them, others may not. How do they decide what is right for them?
Getting The Right Coverage
Under the new law, every person covered by a Personal Auto policy must choose a level of Personal Injury Protection (PIP) coverage. If you get in a motor vehicle accident, PIP coverage pays allowable expenses for your care, recovery, or rehabilitation, wage loss, and replacement services, up to the limit available under the applicable policy. There are different options for PIP, ranging from unlimited medical coverage to completely opting out.
Medicare recipients can opt out from PIP medical benefits if they satisfy two conditions:
The insured is covered under Parts A and B of Medicare; and
The insured’s spouse and any resident relatives have Medicare, “qualified health coverage,” or have no-fault PIP coverage under another policy.
They also have the option to select unlimited lifetime PIP benefits under their auto policy, or PIP benefits with limits of $500,000 or $250,000 per person per accident.
My parents could save money on their insurance premium by opting out of PIP coverage, but if there’s an accident, they won’t have coverage under their auto policy to assist with medical bills if they are injured. Also, Medicare may limit or exclude some expenses that their auto insurance may pay.
Making The Right Choice (For Them)
It’s important for them to take the time to review their Medicare and supplement plans to make a decision that is right for them, taking into consideration how much they want to pay in premiums. They also need to think about how much risk they’re willing to take that some forms of care or treatment may not be covered.
Hastings Mutual is here to help. We provide information on our easy-to-understand no fault reform webpage where you might identify your family’s situation in one of our nine different scenarios. There’s a clear explanation of no-fault reform in our downloadable Driver’s Guide, too.
Your local independent insurance agents are ready to help you learn how your personal auto policy will be affected by Michigan’s no-fault reform and assist in choosing the right coverage.