Insurance Insights

Auto Insights – The New Michigan Auto Insurance Reform Law
Part 3: QHC

Michigan Auto Insurance Reform –
How Qualifying Health Care (QHC) Impacts Your PIP Coverage

If you decide to change your Personal Injury Protection (PIP) coverage under the new reform law, you’ll have multiple options to consider. To help determine the option that best suits your needs, it’s important to understand the basics of QHC and how it can impact your choice of PIP coverage.

What is QHC?
Qualifying Health Care, or QHC, is health insurance coverage that does not exclude or limit coverage for injuries related to auto accidents. In addition, QHC deductibles cannot exceed $6,000 per person.

Some of the new PIP coverage options are only available if you have Qualifying Health Care, so it makes sense to first ask your health insurance carrier if your coverage is considered QHC.

PIP Coverage Options
Here’s a breakdown of the different PIP options with respect to availability and qualifications. Coverage options 1 through 3 are available to ANYONE, regardless of their health insurance coverage. The remaining options include considerations for QHC.

Option 1: Unlimited Coverage

This is the coverage all Michigan residents have had prior to the new reform law. This option is still available to anyone, so you can select to continue it.

Lower coverage limits are available with Options 2 or 3.

Option 2: Limited Coverage of $500,000

Option 3: Limited Coverage of $250,000

Option 4: Limited Coverage of $250,000 with PIP exclusions

When this option is selected, certain individuals on a policy can be excluded from PIP coverage.

  • The named insured must have Qualified Health Coverage (QHC) that is NOT Medicare in order to be excluded and MUST provide a letter from their health care provider verifying that their health insurance coverage is qualified.
  • A spouse or resident relative may be excluded from PIP coverage if they ALSO provide proof from their healthcare provider of QHC.

Option 5: Limited Coverage of $50 ,000

You may choose this option if:

  • The named insured is enrolled in Medicaid; AND
  • Spouse and resident relatives are also enrolled in Medicaid, Medicare OR have QHC, OR have their own auto insurance with PIP coverage

Option 6: For Seniors Only – No PIP Medical Coverage

If you are a Senior with Medicare, you can choose to Opt-Out of PIP Coverage.

You may choose this option if:

  • The named insured and spouse are 65 years old or older and are covered by Medicare Parts A and B; AND
  • All resident relatives are enrolled in Medicare, OR have QHC, OR have their own auto insurance with PIP coverage

Other PIP options are still available for seniors with Medicare, including the following:

  • Unlimited Coverage (see PIP Option 1)
  • Limited Coverage of $500,000 (see PIP Option 2)
  • Limited Coverage of $250,000 (see PIP Option 3)

Some Things to Consider When Weighing the Impact of QHC On Your PIP Coverage:

Auto insurance companies will require proof of QHC.
This will include a request for a health care insurance provider to draft a letter stating the policy in question does not exclude auto related injuries.

Compare your QHC coverage with PIP coverage
Make sure that you understand what your QHC policy covers if you’re injured in a car accident. You may find that your Qualified Health Care coverage is not equal to the coverage available under PIP. In fact, PIP often provides coverage for allowable expenses that are limited or missing from a QHC policy.

Depending on the coverage limit you select, PIP typically pays for some or all of the following expenses:

  • Medical Expenses: doctor visits, hospitalization, surgeries, MRI’s, physical therapy, rehabilitation, prescription medications
  • Vehicle Modifications: wheelchair accessibility, modifications which would allow the injured person to operate a vehicle
  • Home Modifications: elevators, ramps
  • Medical Equipment: walkers, canes, crutches, wheelchairs
  • Medical Mileage: reimbursement for transportation costs when seeking medical treatment and care
  • Attendant Care: assistance with daily activities for an individual injured in an auto accident. Care can be provided by a family member or outside source

Understand what Medicare covers
It’s also important to consider that since not all specialists participate with Medicare, care options may be limited. Additionally, if a senior has a previous medical condition, it’s possible the time needed to heal can be lengthened, and extend beyond that which is covered by Medicare.

How Can You Make Sure You Have the Right Level of Protection?

Educate yourself. Contact your health care insurance provider and learn how your medical coverage coordinates with your auto insurance. A representative from your auto insurance carrier will be sending you more details in advance of the July 2, 2020 effective date. Reading and understanding these materials will help you determine the best option for you and your family. You’ll also find helpful Michigan Auto Insurance Reform Law information by visiting Michigan.gov/autoinsurance. Of course, our VTC agents are ready to answer any questions you might have. Give us a call, or visit vtcins.com.

We invite you to check out our blog next week for an in-depth look at Order of Priority, which determines which auto policy is responsible for paying benefits.

Call VTC