PIP election extended; deductible raised

Summary#

Michigan Senate Bill 1208 would amend section 3107d of the Insurance Code of 1956; it does not create a new law. Its stated goal is to change how long an election not to maintain personal protection insurance (PIP) coverage remains in effect. The supplied bill text appears to make that election last while the policyholder stays with the same insurer or an affiliate, and to raise and adjust the deductible limit for qualifying health coverage.

  • The election would remain in effect with the same insurer or an affiliate unless the insured revokes it in writing.
  • The deductible limit for one type of “qualified health coverage” would rise from $6,000 to $6,579, with later adjustments tied to a medical-price index and a $500 minimum adjustment trigger.
  • The election applies not only to the applicant or named insured, but also to their spouse, certain household relatives, and others who could otherwise claim PIP benefits under the policy.
  • The bill text retains rules requiring PIP coverage to be obtained within 30 days if required household members lose qualified health coverage.

What it means for you#

  • Applicants and named insureds: The supplied text defines a “qualified person” as someone with Medicare coverage under parts A and B. An applicant or named insured must meet that definition to elect not to maintain PIP. Their spouse and resident relatives must also have qualifying health coverage or PIP coverage.
  • People covered by an election: If an election is made, it applies to the named insured, their spouse, certain relatives living in the household, and other people who would otherwise have a right to claim PIP benefits under the policy.
  • Policyholders who change insurers: The election is stated to continue with the same insurer or an affiliate, unless revoked in writing. The bill does not say that it carries over to an unrelated insurer.
  • Households that lose qualifying health coverage: The named insured must obtain PIP coverage within 30 days. If they do not, an injured person may be excluded from PIP benefits for the period without coverage, though the text allows a claim under the assigned claims plan in certain circumstances.
  • The bill does not itself require people to opt out of PIP or directly change the PIP benefits available to people who keep that coverage.

Money#

No cost information is in the available material.

  • The bill requires the insurance director to adjust the deductible limit over time, but gives no estimate of the staff time or public cost.
  • No estimate is provided for effects on insurance premiums, household costs, or insurer costs.

What is unclear#

  • The parent Act was not supplied, and the bill text has unclear insertion and deletion formatting. The exact changes compared with current law could not be fully verified.
  • The text does not explain how the longer-lasting election would be communicated to policyholders at renewal, or how insurers would handle a change to an unrelated insurer.
  • It is unclear how the $6,579 deductible limit and its future adjustments interact with the separate definition of “qualified person,” which is limited in the supplied text to people with Medicare.
  • The bill does not provide an implementation date or describe how the insurance director will calculate and publish adjustments.

Case for#

  • A lasting election could reduce repeat paperwork for people who remain with the same insurer and continue to meet the requirements.
  • Raising the deductible limit and adjusting it for medical-price changes could keep more health coverage within the stated deductible ceiling over time.
  • Requiring the election form to explain the risks and the option to buy PIP could help applicants understand the choice.

Case against#

  • A longer-lasting election could leave people without PIP if they forget it remains in force or their household circumstances change.
  • The bill does not describe a renewal reminder or another check that policyholders still understand the election and meet its conditions.
  • The eligibility wording may be difficult to apply: the deductible rule concerns one type of qualified health coverage, while “qualified person” is defined as a person with Medicare.
  • The supplied text does not establish the full effect of these changes against current law, making it harder to judge who would newly qualify or how many people would be affected.