Who Pays Medical Bills After A Michigan Car Accident?

Making an insurance claim after a car accident can be intimidating. You are worried about the financial costs, how much the insurance company will pay for your car, and who will pay the medical bills for your injuries.

But it is important to understand the basics before calling the insurance company. You don’t want to make any mistakes during your Michigan car accident settlement that could cost you thousands of dollars.

If necessary, calling a Michigan insurance claim lawyer at The Lee Steinberg Law Firm is always a good idea to find out your rights.

Who Pays Medical Bills After a Car Accident?

There are certain rules that determine which insurance company pays the medical bills arising from a car accident. In many cases, the car insurance carrier is responsible for paying the bills. This can be true even if the injured person has health insurance.

The medical coverage is called Personal Injury Protection (PIP). Almost everyone purchases some level of PIP medical coverage. However, the order of who pays can change based on other insurance you might have.

1. Medicare and Medicaid

Medicare and Medicaid generally do not pay for auto accident-related injuries first. In those situations, the injured person must turn to a car insurance company to pay medical bills. Both Medicare and Medicaid are secondary payors; this means they pay only after auto insurance pays what it is supposed to.

2. Private Health Insurance

A private health insurance company like Blue Cross Blue Shield of Michigan or HAP may be first in line to pay for auto accident-related policies. This is usually the case if the claimant purchased a coordinated auto policy.

In these cases, the medical portion of an auto policy coordinates with private health insurance, and auto only pays after health insurance pays first.

However, some private health plans do not cover auto accident expenses. This is especially true if the plan is self-funded under ERISA. A Michigan insurance claim lawyer can review the health plan documents and let you know whether the plan will cover car accident medical bills.

3. Car Insurance (PIP)

In almost every situation, when someone is injured in a car accident, a car insurance company must pay for medical bills related to the car accident. This is because in Michigan, auto insurance policies include Personal Injury Protection (PIP) coverage.

PIP coverage is medical coverage specifically for car crash-related medical expenses. The amount of medical coverage depends on how much the vehicle owner purchased.

Which Auto Insurance Company Pays? (The Order of Priority)

There are special rules for which car insurance company is responsible for paying the medical bills after a crash. It is called the “Order of Priority.”

The order of priority changed a few years ago and is now fairly straightforward. Further, the insurance company responsible for paying medical bills after a Michigan car accident is the same whether you were inside the car or outside the vehicle (pedestrian) at the time of the crash.

Under MCL 500.3114(1), the order for who pays first-party no-fault benefits is the following:

1. Your own auto insurance
2. Resident relative (a spouse or blood relative you live with)
3. Michigan Assigned Claims Plan (MACP)

Step 1: Your Own Auto Insurance Pays First

First, a person injured in an auto accident always starts with their own car insurance. This is true even if your vehicle had nothing to do with the crash.

Your own car insurance is always first in line to pay medical bills and expenses. PIP benefits cover reasonably necessary medical expenses after a crash, such as physical therapy, doctors’ bills, rehab, wheelchairs, and hospital costs. These benefits are available regardless of who caused the accident.

Step 2: Resident Relative

If you don’t have insurance, but you live with a relative or spouse who does have auto insurance, then that carrier must pay the no-fault benefits.

For example, if you don’t have auto insurance, but you live with your mom, and she has State Farm Insurance, State Farm must pay the claim. Again, this is the rule even if your mother’s car was not involved in the accident.

Step 3: Michigan Assigned Claims Plan

If there is no auto insurance at those levels, then the claimant must go through the Michigan Assigned Claims Plan (MACP). This Plan, created by the legislature, means the State of Michigan will assign a car insurance carrier to handle and pay your claim.

To get an insurance carrier assigned, an application must be completed. It is important to contact a Michigan car accident lawyer to help you with the application process.

Special Rules for Who Pays Car Insurance Claims

There are some exceptions to the standard order of priority.

Uber or Lyft Rides

If you are injured while a passenger in an Uber or Lyft car:

• Your own auto insurance company must cover the medical claim first.
• However, if you don’t have auto insurance, the Uber or Lyft driver's auto insurance must pay the benefits (MCL 500.3114(2)(g)).

City Bus or School Bus

If you are injured on a city bus:

• Your own auto insurance is first in line to pay medical bills.
• However, if you don’t have auto insurance, the bus company's insurance carrier must pay the benefits. This same rule applies to private buses too.

Employer Owned Cars

Under MCL 500.3114(3), if you suffer an injury while in a vehicle owned by your employer, you must get no-fault benefits through the employer’s auto insurance company. This applies to the employee, their spouse, or a resident relative.

How Much Medical Expense Coverage Do I Have?

The amount in medical bills the car insurance must pay depends on the amount of coverage purchased. Under the law, there are specific choices policyholders can make:

• Unlimited PIP coverage: (The best protection)
• $500,000 PIP coverage
• $250,000 PIP coverage
• $50,000 PIP coverage: (Only for Medicaid beneficiaries)
• No PIP coverage / Opt-Out: (For Medicare beneficiaries or those with qualified health coverage)

Once the injured person exhausts their own medical PIP coverage—whether it is $50,000 or $250,000—they can turn to the negligent driver for payment of the excess medical bills.

However, under Michigan car accident law, injured drivers are at the mercy of the negligent driver's liability coverage. If your medical bills are more than the at-fault driver’s insurance, and your PIP is all used up, you may get stuck with outstanding bills. This is why it is important to select a higher PIP limit.

The Best Michigan Insurance Claim Lawyers Near Me

For over 50 years, The Lee Steinberg Law Firm has helped injured victims win their cases to collect the compensation they need and deserve. We care about our clients' health and well-being.

The results of a car accident in Michigan can be traumatic—let us help you get the compensation you need to recover. Please call our Michigan car accident settlement attorneys at 1-800-LEE-FREE (1-800-533-3733) or fill out the Free Case Evaluation Form so we can answer any questions you may have. You pay nothing until we settle your car accident case.