If you get in an accident and you have both health insurance and no-fault auto insurance, which one pays your medical bills? Before this year, the answer was pretty clear cut. If you had health insurance, it was almost always on the hook. If you did not have health insurance, then your no-fault auto insurance paid the medical bills. But the Affordable Care Act (Obamacare) has everyone pointing fingers.
Prior to Obamacare, if you had both health and “coordinated” auto insurance, your no-fault insurance provider could “set off” any treatments paid for by your health insurance. Most people chose “coordinated” plans because they were usually less expensive.
So for example, if a doctor’s office visit relating to your accident would normally cost $100 but you only paid your $20 co-pay, then your no-fault insurance provider could reduce the amount it paid you by the $80 covered by your health insurance.
The only exception was for government-provided or government-required insurance like Medicare or Medicaid. For those patients, the no-fault insurance provider paid first.
But the individual mandate of the Affordable Care Act arguably made all health insurance “government-required.” By requiring all but a select few American citizens to purchase health insurance or pay a tax, the federal government may have created a loophole through which Michigan no-fault insurers can pass the buck back to the health insurance providers.
A recent RAND Corp. study revealed a much smaller drop in car crash claims than previously expected: as little as 1.3% by 2016. Senior researcher David Auerbach attributes the small change to the fact that:
“The percent of the population that is gaining insurance under the ACA is not overwhelming, despite all the cataclysmic comments and predictions.”
But while the car insurers won’t save any money, the shift in the law could cost health insurance companies. Rick Murdock, the executive director of the Michigan Association of Health Plans, a nonprofit that advocates for state health insurers, is concerned that:
“One way or the other costs are being covered by insurance where it before might have been no-fault or auto insurance.”
Attorneys who represent motorists are concerned too. If the courts rule that all health insurance is protected like Medicaid and Medicare, it could drastically reduce the amount of relief accident victims are able to collect. It is a question that is going to come before the Michigan courts soon. But it’s not clear which side will point the finger first. Even if the courts do decide to allow the set-off, that decision could also change with the proposed No-Fault Reform bills being considered by the House and Senate.
The experts at Christensen Law in Southfield, Michigan, are on top of the changing dynamics in the insurance world and they know how to get you or your loved one the relief you need. If you have been injured in an auto accident, contact David Christensen and his team today for a consultation.