Recent Blog Post

If I Have Medicare Can I Opt Out of PIP Insurance?

Steven Matz
December 14, 2022 | Car Accident

Key Takeaways

  • There are limited reasons a Michigan driver can opt out of PIP coverage.
  • Medicare might cover some accident-related injuries for crash victims who have opted out of PIP coverage.
  • Reasons for opting in and out of PIP coverage will depend on your circumstances, though our attorneys generally recommend clients obtain unlimited PIP coverage.

Michigan is one of just 12 states in the United States that requires most drivers to purchase personal injury protection or PIP insurance. It is a no-fault state. By law, each driver must purchase at least $50,000 in bodily injury coverage and $100,000 in total bodily injury per accident. These requirements can make insurance more expensive for those in Michigan, but there are some situations where a driver can opt out of PIP.

If you are in an accident in Michigan, and your insurance company refuses to give you a fair settlement, contact Matz Injury Law at 866-226-6833. Our compassionate car accident lawyers can help you fight for your rights based on your insurance policy. We can also help you file a claim against an at-fault driver when the damages to compensate you for your injuries exceed your PIP policy limits. Call us to schedule a free consultation.

What is Personal Injury Protection in Michigan?

In Michigan, personal injury protection, or PIP, is no-fault car insurance coverage. It helps cover some of the most common expenses that arise after a car accident, including:

  • Medical bills
  • Funeral costs
  • Lost wages
  • Household services like yard work and cleaning
  • Disability and rehabilitation costs

This insurance coverage allows the driver to look to their insurance company for payment instead of asking the at-fault driver for compensation first. If the driver’s PIP coverage is not enough to cover all of the expenses related to the accident, then the car accident victim can file a claim against the at-fault driver, as well.

Unless you meet a few very limited exceptions, all drivers must have PIP in Michigan. There are six different levels of insurance plans or coverage options available for PIP, and as coverage increases, so will premiums in most situations.

  • Unlimited coverage
  • Up to $500,000
  • Up to $250,000
  • Up to $250,000 with PIP medical exclusions (for those who also have health insurance that will cover auto accident injuries)
  • Up to $50,000 (for those enrolled in Medicaid)
  • PIP medical opt-out (for those enrolled in Medicare)

Each of these upper limits is the most the insurance company will pay per accident, per person.

When Can I Opt Out of Personal Injury Protection (PIP)?

Most drivers in Michigan do not have the option to opt out of PIP benefits. However, there are some limited circumstances in which drivers who also receive Medicare benefits can opt out of PIP coverage.

The insured person must meet the following criteria to opt out of PIP:

  1. Any named insured with both Medicare Parts A and B can opt out of PIP as long as second point is also met.
  2. All other household members also have another Michigan auto insurance policy or other qualified health coverage.

Essentially, that means that Medicare enrollees can opt out if they do not have anyone else in their household that needs PIP coverage.

In addition, a lower-premium option might be available to some drivers who have health insurance that will cover auto accident injuries. This coverage is still for $250,000 but often has a lower premium because another (non-Medicare) healthcare insurance is available to the driver and other household members.

Can I Opt Out of PIP If I am on Medicaid?

Those on Medicaid do not have the option to completely opt out of PIP. Instead, they can choose a lower amount of PIP coverage. They can elect to only have $50,000 in PIP. However, they also have the same restriction as those on Medicare — if anyone else in their household is not on Medicaid and needs PIP, they might be unable to choose this lower coverage amount.

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What Happens If I Opt Out of Personal Injury Protection in Michigan?

If you choose to opt out, you often save substantial money because you do not need to pay insurance premiums. However, remember that Medicare does not provide the same types of benefits as PIP, so you might not have as many options for compensation if you are involved in an accident.

It is important to understand the difference between Medicare and PIP before you opt out of coverage. For instance, Medicare will pay for medical costs but does not cover things like lost wages or household services (in most situations).

Will Medicare Pay for Car Accident Injuries Under the New Law?

In July 2020, Michigan revised its no-fault insurance laws, originally established in 1973, to offer drivers more affordable Personal Injury Protection (PIP) coverage options. Previously, Michigan drivers were mandated to have unlimited PIP coverage, often resulting in high costs. The 2020 changes allow for reduced PIP coverage, with set limits on the insurer’s payout after an accident.

Before these changes, Medicare served as a secondary payer to PIP for medical expenses from car accidents. However, this often led to Medicare paying for costs that PIP should have covered, followed by Medicare seeking reimbursement from PIP insurers. Post-2020, the Michigan Insurance Commissioner clarified that for those opting out of PIP, Medicare will cover accident-related injuries. It also applies when PIP coverage limits are reached, positioning Medicare as a secondary payer only when PIP is available.

How Does Coverage Differ Between Medicare and Personal Injury Protection?

Before deciding whether to opt out of PIP, individuals and families need to understand the differences between these two types of coverage. The main difference is that Medicare covers just medical care, while PIP coverage provides reimbursement for other types of losses. However, there are also some medical expenses that Medicare will not cover.

PIP coverage often includes the following benefits that Medicare will NOT provide:

  • Long-term care or custodial care as a result of the car accident
  • Residential treatment programs
  • Case management services
  • Guardianship or conservator services
  • Physical, speech, and occupational therapies
  • Massage therapy
  • Vehicle modifications
  • Wage loss

Medicare coverage will provide some limited therapies, durable medical equipment, specialty assistive devices, attendant care, and skilled nursing facility expenses. Limitations are often extensive for each service, but some benefits may be available.

When Should I Opt Out of Personal Injury Protection?

a female nurse tending to a elderly male patient in a hospital

You get the benefits of lowered costs (in premiums, deductibles, and co-payments) if you opt out of PIP coverage. However, those cost savings could disappear if you end up in an accident. PIP coverage provides several valuable benefits that Medicare simply will not cover.

At Matz Injury Law, our legal team generally advises clients to obtain unlimited PIP coverage. Medicare often requires you to undergo extremely conservative treatment before approving more costly surgeries. In some situations, this delay in treatment can cause significant long-term problems. We have seen car accident victims struggle to get approval from Medicare for even relatively minor procedures and testing, like injections or an MRI. PIP must pay all reasonable and necessary expenses related to the car accident, so the approval process is often more streamlined and efficient.

Medicare will also usually assert a lien against any claim you have against an at-fault driver. If there is PIP coverage, then medical expenses are paid for by the PIP insurance company. If there is no PIP, medicare may assert a lien on any compensation the car accident victim receives from the at-fault driver.

The only time opting out of PIP coverage works in favor of a Michigan car accident victim is when they caused the accident. In that type of situation, Medicare will not assert a lien.

When Can I Sue the At-Fault Driver for Damages After a Car Accident?

If you have PIP coverage, you first turn to your own insurance company for reimbursement related to medical bills, lost wages, and other damages. If you have opted out of PIP coverage, you always have the option to sue the at-fault driver.

As part of your suit against the at-fault driver, you can request compensation for anything Medicare paid for (and they likely asserted as part of their lien) and any medical bills you had to pay yourself. You can also request non-economic damages, like pain and suffering, from the at-fault driver as well.

Why Clients Choose Matz Injury Law

Our diligent and consistent advocacy for injury victims across Michigan over the years has consistently earned us glowing testimonials for our valuable legal advice in numerous personal injury cases. Our firm has earned over 300+ million dollars for our Michigan clients.

Client Testimonial

“My family is grateful for Steve Matz’s professional handling of our case.  Steve was very thorough, candid, responsive, and strategic in his approach throughout our legal proceedings.  If ever in a situation again like my family has experienced over the past year, we would immediately retain Matz Injury Law to represent our interests. Thank you Steve.” –John P.

Recent Settlement

In one of our recent settlements we were able to receive a $4,150,000 settlement on behalf of the family of a college student who was killed in a traffic crash while riding a motorcycle. The settlement came from three different insurance companies.

Need to Cover Your Medical Expenses After a Car Accident? Matz Injury Law Can Help

If you have already opted out of PIP and cannot afford the treatments for your injuries, you might have the option to sue the at-fault driver. At Matz Injury Law, we can often help car accident victims get compensation for their injuries. Calls our Michigan law firm at 866-226-6833 to set up a free consultation.

Frequently Asked Questions

Can I Opt Back Into PIP Insurance After Initially Opting Out?

In Michigan, if you initially opt out of Personal Injury Protection (PIP) insurance and later decide you want to opt back in, it is generally possible to do so. However, there are a few important points to consider, such as policy renewals and changes, insurance company policies, and state regulations.

Should I Have Unlimited PIP Coverage in Michigan?

While our attorneys generally recommend having this type of coverage, deciding whether to have unlimited Personal Injury Protection (PIP) coverage in Michigan is an important decision that depends on several factors unique to your personal, financial, and family situation.

Is Michigan the Only State With Unlimited PIP?

Yes, currently, Michigan is the only state with an option for unlimited PIP coverage.

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Written By Steven Matz

Founding Shareholder

Steven J. Matz is a founding shareholder of Matz Injury Law. The firm’s concentration is on personal injury litigation, with an emphasis on traumatic brain injury.

The maximum contingency fee permitted by law is actually 331/3%. Michigan court rules require that the attorney fee be computed on the net sum recovered after deducting all disbursements properly chargeable to the enforcement of the claim.

What does 22not33 mean, exactly?

We can charge 22% while virtually all other injury attorneys charge 331/3% because we are very, very, good at obtaining results for our clients.

We do not spend millions of dollars on television ads; instead, we offer a lower fee to all our clients. We do not have dozens of lower paid associates handling our work. All our clients are represented by Steven and Jared Matz. Steven Matz started the firm in 1977 and since then has dedicated his life to representing injury victims. Jared joined the firm in 2016 but grew up listening to stories, discussing theories, and generally learning at the dinner table about how to effectively and compassionately represent injury victims. Jared Matz was literally born to represent individuals involved in motor vehicle crashes.

All of our cases are handled on a contingency fee and all our cases are handled at 22%. Whether the case settles or goes through trial, the fee does not change. While our competitors make excuses as to why they charge so much, we are obtaining results for our clients at a lower fee.

At a typical television advertising law firm, your first call will be handled by a receptionist, who may refer you to an intake person, who will discuss your claim with an intake manager, who then discusses your claim with an associate, who may then report to a partner. You may never speak with the person whose name is at the top of the letterhead. At Matz Injury Law you will always speak with either Steven Matz or Jared Matz.