The short version is that is you have Medicare, but are not eligible for Medicaid and have any assets worth protecting, we recommend you keep your unlimited PIP (Personal Injury Protection). The chart below helps to show why.
In 2019, dramatic changes were made to the Michigan auto insurance law. Drivers now are faced with a number of choices in Personal Injury Protection coverage (PIP), that if selected, could have devastating consequences should they, or their loved ones, suffer serious injury in an auto crash.
Seniors now have the option to completely opt-out from no-fault allowable expense PIP benefits if they satisfy the following two conditions:
1) the person is covered under Parts A and B of Medicare; and
2) the person’s spouse and any resident relative has Medicare “qualified health coverage,” or has no-fault PIP coverage
under a separate policy.
Seniors who select this option are not entitled to coverage through the Assigned Claims Plan (ACP) when injured as an occupant of a motor vehicle, but are likely entitled to ACP coverage when injured as a non-occupant or pedestrian, and there is no other insurer from which to recover PIP benefits. ACP medical benefits are capped at $250,000.
Before you consider this option, it is vital to understand what benefits are not available under Medicare, but may be needed should you be severely injured in a crash. Below is a table identifying how the care and rehabilitation needs of a vehicle crash survivor are covered under Michigan’s auto no-fault lifetime/unlimited medical expense coverage vs Medicare.
* With no MSP or Supplemental Coverage | *2022 limits according to Medicare.gov
• Care options may be limited since not all specialists participate with Medicare
• Seniors are more likely to have previous medical conditions such as Parkinson’s Disease, stroke, osteoporosis,
diabetes, arthritis and heart disease that may complicate and lengthen the recovery process from an auto accident
• If the senior received a settlement from an accident claim, Medicare is entitled to recover the cost of any medical
expenses paid to the claimant.
Now that the 2022 plans and prices are available on Medicare.gov we have an opportunity to see what Medicare reports as the retail price on prescription drugs. Every year we find new and exciting examples of seniors being taken advantage of through pharmaceutical over pricing. Remember that the Retail price reported by Medicare is the retail price of the drug reported to them by the pharmaceutical company. Medicare is not allowed to question that price, shop that price or offer alternative pricing. This is the law passed by congress that took effect in 2006 and was written with the help of the pharmaceutical companies.
There have been attempts to allow the government to negotiate on behalf of seniors but there is a strong lobby protecting special interests. All attempts to change the status quo have failed for 15 years. A recent example is Levothyroxine Sodium which is the generic version of Synthroid.
The Medicare price for 30 pills is $152.48 but a check of GoodRx shows that you can get the same number of pills for $4 at Walmart. Why is Medicare 38 times higher that the street price? Seniors who don't shop their drugs will be taken advantage of by their government. Medicare has many rules in place to protect seniors but they fall short where big pharma is concerned. Caveat Emptor is the lesson here - let the buyer beware or more appropriately be aware. Know the street price of your drug before you go to the pharmacy. Be prepared to demand a fair price even if it means paying cash instead of a copay. When paying cash realize that any amount you spend will not count towards your total drug expenditure for the year which may make it more expensive to enter into the catastrophic level of coverage provided for under part D of Medicare.
In early March I finally had my turn to get the shot. As I lined up outside the Hagerty Center I was pleasantly surprised - in and out in 25 minutes. That included all the paperwork and waiting time after I received the vaccine. mRNA vaccines are new but they have been known about and studied for decades. They were long recognized as a preferred way to deliver a vaccine in part because of their ability to handle some mutations. Unfortunately they were too expensive to manufacture and distribute so the idea just sat on the shelf.
That is until the pandemic. When the country was put on a war footing, with virtually unlimited funding, the opportunity opened up to make them available. Now that the cost barrier has been broken we have access to new and better vaccines. The benefit could be as revolutionary as penicillin and comes at a time when it was beginning to look like virus's and germs would regain the upper hand.
Herd immunity is now within reach and the 70% number has been bandied about but I believe 80% would be more effective. Herd immunity is based on antibodies and there are only two ways to get them. Get a vaccine or get the disease. I know many young people have forgotten the scourges and deaths that were the result of smallpox, diphtheria, polio, scarlet fever and gangrene. My family has experienced all of these and we only need to look back 5 generations to see it.
Up to now covid costs have been borne by insurance companies and the government with no patient liability. That will not remain the case. In only a few months deductibles, copays and out-of-pocket maximums will begin to apply. Someone who has symptoms and tests positive should plan on at least 2 weeks of lost wages. Set aside about $1,500.00 so you can have groceries and a roof over your head. If you end up hospitalized it will only take 2 days to run through your deductible and out-of-pocket limit on most plans. Plan on another $6,900.00 there. All told relying on the sickness to give you immunity will expose each person to almost $10,000.00 in potential costs. It may be higher for families or couples. The average cost for a patient hospitalized for Covid is $317,000.00. This is more than even serious coronary bypass surgery.
The unseen cost is the toll it can take on heart, lungs, kidneys and brain health. Life expectancy has been shortened and it will be decades before the full impact is known. Weakened systems may take years to fail so those costs are kicked down the road. In 1902 at the age of 7, my grandmother lost all her hair when she had scarlet fever and diphtheria at the same time. She recovered and her hair came back - but the heart murmur was with her the rest of her life and was her eventual cause of death over 70 years later.
Everyone will eventually play a part in herd immunity. The question is how much are you willing to pay for it?
• With PIP, there are no deductibles or co-pays. With Medicare, you are responsible for all applicable deductibles and copays.
• Not all medical specialists participate with Medicare.
• Important to note: if a Senior Citizen receives a settlement from an accident claim, Medicare is entitled to recover the cost of any medical expenses paid to the claimant.
When health care reform via the Health Insurance Marketplace was first introduced it included a fee called the Patient Centered Outcomes Research Institute Fee. It was originally identified as a best practices panel that would be appointed to make sure finite health care dollars were wisely spent and not wasted on procedures that would not appreciably extend quality of life. Immediately opponents identified it as a death panel that would ration healthcare. Physicians can best answer if this is the case now that some of the higher cost specialties have had the government change how they practice medicine via quality measures. In the meantime the fee or tax is still being collected to fund the PCORI.
The IRS has announced that the 2019 calendar plan year Patient-Centered Outcomes Research Institute Fee (PCORI) for the July 2020 filing will be $2.54 per covered individual (up from $2.45).
As a reminder, health reimbursement arrangements (HRAs) are considered self-funded health plans and are therefore subject to the PCORI fee.
In IRS Notice 2020-44, the IRS has now released the fee for plan years ending on or after October 1, 2019 and before October 1, 2020, which includes 2019 calendar plan years that will report and pay the PCORI fee this July.
For additional information and help determining your PCORI fee, check out this PCORI fee calculator here.
PIP (Personal Injury Protection) is one of the costs that made Michigan the most expensive auto insurance in the country. Effective July 2nd drivers in Michigan will have additional options when choosing the level of PIP coverage they will have. Seniors on Medicare will have the option of dropping PIP altogether. In general we are recommending that seniors keep their full PIP coverage. We can site an example for why this is a good idea but the coverage speaks for itself.
Medicare is always considered a secondary payer in auto accidents and covers benefits subject to Medicare rules. Members will be required to pay their plan copays, if any.
There are many items covered under an auto policy’s medical coverage that Medicare does not cover, including, but not limited to:
If Medicare pays for auto-related claims, Medicare can seek reimbursement from any settlement that a beneficiary receives for pain and suffering, thereby leaving less to compensate the beneficiary.
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