Choosing a Michigan PIP Limit With a Long-Term Care Exposure
Denise, 61, lives in Grand Rapids and drives about 40 miles a week to a part-time job. She has Medicare Parts A and B but no other health coverage, plus a prior lumbar fusion that her physician says could eventually require help with dressing, bathing and transfers. She is choosing Michigan PIP limits on her 2019 sedan and is quoted three options: (1) unlimited PIP; (2) $250,000 PIP medical with a $2,500 deductible; (3) a Medicare opt-out excluding PIP medical benefits. The annual premium spread between option 1 and option 2 is $210; the spread to option 3 is $640. Her MCCA assessment would be roughly $228 per vehicle at option 1 and roughly $48 at options 2 and 3. Her daughter, who lives with her, would provide any attendant care unpaid.
1. Which of the three options best fits Denise's exposure? Quantify what she gains and gives up, and name the benefit most at risk in each option.
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Identify the exposure first. Attendant care falls inside the PIP medical benefit category in Michigan, so the PIP medical limit - not Medicare - controls Denise's worst-case scenario.
- Option 2 ($250,000 / $2,500 deductible): she saves about $390 a year ($210 premium + $180 MCCA). Attendant care draws down the $250,000; at a fee-schedule rate for roughly 40 hours a week, that limit could be exhausted in about four years. After that, custodial care is unfunded.
- Option 1 (unlimited): no lifetime ceiling on attendant care; costs the $390.
- Option 3 (Medicare opt-out): Medicare pays accident-related medical bills but does not pay custodial attendant care, and family caregivers go unpaid. Opting out also removes the medical benefit for the whole policy term.
Judgment: $390 a year is trivial against a six-figure attendant-care tail. Recommend unlimited and document the comparison.
2. Denise selects option 2. Fourteen months after a crash her attendant-care and medical charges have consumed the $250,000. What pays next, what benefits survive, and what should the agent's file contain?
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What survives the limit. In Michigan the reduced PIP medical limit caps medical benefits only. Wage loss and replacement services (statutory daily cap) remain payable, so some income protection continues.
What pays next. Medicare will consider accident-related medical treatment, but not custodial or attendant care; family-provided care becomes an out-of-pocket family obligation. Medicaid is available only after eligibility and spend-down. Her own assets fill the gap. The limit is per person per accident, not annual, so it does not reset with the policy term.
File documentation the agent must hold:
- The signed Michigan PIP selection form (a reduced limit or opt-out is unenforceable without the required signed form and the required coverage offer).
- The written comparison of options, including the MCCA difference.
- A note showing the client's stated reason for choosing the lower limit.
Missing documentation converts a coverage dispute into an errors-and-omissions claim against the agency.