Last Updated on July 22, 2025 by The Insurance Pros
Can Michigan Seniors with Medicare Opt Out of PIP? Risks & Savings
Michigan seniors enrolled in Medicare Parts A and B have the option to opt out of Personal Injury Protection (PIP) medical coverage on their auto insurance policy. While this can reduce your premium, there are important risks to consider before making this decision.
Who Is Eligible to Opt Out of PIP?
To qualify for PIP opt-out in Michigan:
- You must have both Medicare Part A and Part B.
- Your spouse and any relatives in your household must have their own qualified health coverage or auto insurance that includes PIP medical benefits.
What Does Medicare Cover After an Auto Accident?
Medicare will pay for medically necessary services covered under Parts A and B, such as
- Hospitalization and surgery
- Doctor visits and outpatient care
- Rehabilitation in approved settings
The Hidden Downsides of Opting Out
Loss of Coverage for Extended Care
If you sustain a serious injury in a crash, Medicare will not pay for ongoing rehabilitation, daily care assistance, or home modifications. Seniors who opt out may face large out-of-pocket expenses.
Risk of Medicare Liens on Settlements
If you pursue a personal injury lawsuit, Medicare can place a lien on your settlement to recoup expenses. This can significantly reduce your payout.
Cost Savings vs Financial Risk
The Michigan auto reform law allows seniors to save on their premiums depending on their PIP choice:
- $500,000 PIP: ~20% reduction
- $250,000 PIP: ~35% reduction
- Opt-out (with Medicare): ~100% reduction on PIP portion; MCCA fee is also removed
However, even with these savings, a single accident could result in tens of thousands in out-of-pocket costs for services Medicare doesn’t cover.
🧾 Risk Assessment Checklist
Ask yourself these questions before opting out:
- Would I need long-term rehab or in-home care after an accident?
- Do I want protection for services not covered by Medicare?
- Could Medicare liens reduce a lawsuit settlement?
Expert Recommendations
Many legal and insurance experts recommend that seniors keep unlimited PIP medical coverage or choose lower capped options ($250K or $500K) instead of fully opting out.
These coverages can pay for what Medicare won’t, protecting your home, retirement savings, and independence.
🚗 Get a Michigan Auto Reform Quote
More Information
To learn more about your required coverage, visit the Michigan Bodily Injury Requirements Guide.
