What’s Happening in Michigan?
We’re starting to pay a lot more attention to and are getting a lot more questions relating to car insurance in Michigan. Specifically, how does it relate to Michigan’s auto laws and upcoming changes.
If you are not a resident of Michigan (where our agency is located; thus our “back yard” is pretty darn full of questions!), this really won’t apply to you. Those that it may affect? Please read on and please – share this post with others.
The parts of this puzzle are still a bit in motion. Auto agents that we speak to say they’re not sure if things are quite finalized. Insurance carriers personnel that we speak to say that each carrier seems to have a different interpretation of the law changes. That being said, this is a bit of a moving target so we are writing here with what we know of today.
How Things Work Today
In Michigan as of this writing, our auto insurance is unique (and expensive) because we are the only state in the union that provides unlimited PIP coverage. PIP coverage is “Personal Injury Protection” that is provided to Michigan drivers via their auto insurance policy.
As this relates to Medicare, when people are Medicare eligible (age 65, generically), their auto insurance immediately increases. Why is that? It’s because of the Medicare “Who Pays First” rules you may see here. See page 7.
So, in Michigan as it stands today, that means that when you turn 65, your auto insurance becomes the primary payor of claims. And, that payor provides for “unlimited” medical coverage. What’s the definition of “Unlimited”? I think you know that one.
July 2020 and Beyond
Beginning in July, our 65+ year old’s will have a choice of what they’d like to purchase related to their PIP coverage. There are six options. Option 1 being “retain the unlimited medical coverage” as you have today. Yes, you’ll retain the higher auto premiums as well.
Go all the way down to Option 6 (see form here) and you’ll notice that if you are enrolled into Medicare’s Parts A and B, you may indeed opt out 100% of all PIP coverage. See the disclaimers on the form.
There are other options in between that you may choose as well. Read the fine print of each option and please read it a few times over.
Reality of Michigan Auto and Accidents
Just today, I was reading an article in Crain’s Detroit Business about Dan Gilbert and his recovery from a stroke. (I’ll cut and paste pieces of the article that caught my attention as some people have said that they can’t pull up the article without a login).
The first thing I noted that I didn’t realize was that (to quote) “just a day before his stroke, Gilbert’s political influence at the state Capitol reached a crescendo when his lobbyists finished engineering the Legislature’s passage of a major overhaul of Michigan’s auto insurance law. It was the culmination of years of work by Gilbert and his business organization to lower the cost of insuring vehicles in Detroit.”
On the Saturday night before Memorial Day in 2019, Dan Gilbert suffered a stroke. What Gilbert says was a blood clot in his carotid artery that cut off oxygen-rich blood to his brain.
The health scare has left Gilbert physically thinner, though he’s sporting a thicker, white beard. His speech is clear, if quiet.
Gilbert uses a wheelchair to get around the mortgage company’s One Campus Martius headquarters, alongside a black Lab service dog named Cowboy.
During the interview, Gilbert attempted to move his left arm, which rests in a sling, as he sat in the wheelchair at a small conference table. Gilbert has rarely been seen in public since spending eight weeks last summer at Shirley Ryan AbilityLab in Chicago, a $550 million state-of-the-art rehabilitation facility just a few blocks from Navy Pier and Lake Michigan.
It’s not lost on one of Michigan’s wealthiest men that he’s got access to better rehabilitation therapists than most people do.
He spends three to four hours daily working with occupational and physical therapists inside his Franklin home.
“I start thinking about, imagine people who just don’t have any of these resources. What do they do?” Gilbert asked. “I mean, insurance does not usually cover most of the … rehab from a stroke. Maybe some of it, but not most of it.”
What Does Dan Gilbert’s stroke have to do with auto insurance?
Nothing really. Other than I have another story to relay.
My ex-husband’s wife was enjoying a day with her son and new daughter-in-law who were visiting Michigan following their Rhode Island wedding. They took a trip north on US-127 on a Monday in September, 2018.
Michelle was driving the vehicle at 60 MPH when a truck pulled out in front of her car and hit them head on. Everyone was injured to various degrees, but Michelle took the brunt of the hit. She was transported to a large hospital and admitted with a brain bleed and concussion. Fast forward to Thursday night when, just like Dan Gilbert, a blood clot in her carotid artery cut off oxygen-rich blood to her brain.
Michelle survived the stroke but to this day has aphasia. What this means is that she has a loss in the ability to understand or express speech, caused by brain damage.
Now, remember that unlike Dan Gilbert’s stroke, Michelle’s was the result of an auto accident. Unlimited medical.
To this day, when Michelle’s husband goes to work each morning? A caretaker comes to stay with Michelle all day. She can’t call 911; she requires attendant care. Here is the definition of attendant care from the Michigan auto website. Attendant care means services to assist an injured person with tasks they would normally do for themselves (e.g., eating, bathing, dressing, grooming, and medication administration). It may also involve supervision or other types of support.
Michelle has received outstanding care and a lot of it. The auto carrier will pay her bills forever. She is 59 years old. If they were paying for her care privately, it would bankrupt them in due time. See Dan Gilbert’s statement above as he wonders how people who don’t have his resources handle things.
There are so many variations of car injuries and Michelle’s is an extreme case. That’s what unlimited medical is built for, unfortunately.
Be Careful What You Choose
Everything is a trade-off, right? We all want to have unlimited medical coverage WHEN that auto event might occur. But, in the meantime, we don’t want to pay additional premiums because we are tired of paying the highest car insurance premiums in the land.
There’s No Free Lunch
Our professional advice from our agency to you is to retain the unlimited medical protection you have in Michigan today.
Medicare will not cover “attendant care”. Medicare will not be as generous as our auto carriers are with “unlimited” coverage. We’ve watched Michelle go to $20,000 speech programs and extensive therapies that she would not have received via traditional health insurance policies.
Discuss all of your options with your auto insurance agent. Find out what the savings will be. Talk to your financial advisor about long term care (a.k.a. “attendant care” related to auto above).
Write on a piece of paper how much you might save and note what you might give up. Look at Options 1 through 6 on this PDF provided by the State. Read each word and read them several times before signing off.
Joanne Giardini-Russell is a Medicare Nerd & the owner of Giardini Medicare, helping people throughout Metro Detroit and the country transition to Medicare successfully. Contact Joanne at firstname.lastname@example.org or by calling 248-871-7756.