After a Michigan car accident, your first concern is your well-being. At the same time, emergency care, hospital stays, and follow-up treatment all generate high medical bills that add up quickly. You may expect your health insurance to pay these bills, but Michigan’s no-fault insurance system changes how medical costs are handled. 

Instead of billing your health insurance first, most medical providers in Michigan send those charges to your auto insurance company under Personal Injury Protection (PIP) coverage. This difference surprises many accident victims who believe their health plan automatically covers accident injuries. In this guide, we’ll go into more detail about how PIP coverage works and when medical costs could be potentially shifted to your health insurance.

Michigan’s No-Fault Auto Insurance System Explained

Under Michigan’s no-fault law, your own auto insurance company pays your medical bills and other benefits after a crash, regardless of who caused it. This rule removes disputes over fault from the initial stage of treatment, so you can get medical care without waiting for liability decisions to be made.

Personal Injury Protection, or PIP, is the part of your auto insurance that pays for these benefits. PIP covers medical treatment, rehabilitation, and some wage loss if you can’t work because of your injuries. For decades, Michigan law required every driver to carry unlimited PIP, which meant all accident-related medical bills were paid in full; however, that changed in 2019 when reforms introduced new coverage levels.

Today, you can choose from several PIP options when buying auto insurance. They include:

• Unlimited coverage
• $500,000
• $250,000
• $50,000 (if you qualify for Medicaid) or; 
• Opting out entirely if you have Medicare. 

Each option changes how your medical bills are handled. For example, if you select $250,000 in coverage and your hospital stay costs $400,000, your PIP pays the first $250,000, and then your health insurance is billed for the remaining $150,000. Because of these choices, the no-fault system and your health insurance are closely connected.

What Role Does Health Insurance Play After a Car Accident?

As we explained above, your auto insurance is the first source of payment for accident-related medical treatment. This means hospitals, doctors, and clinics send bills to your auto insurer under PIP coverage before turning to your health insurance. Only after your PIP benefits are used up, or if your policy allows coordination, will your health plan begin paying.

Coordination of benefits is an option some drivers select when buying auto insurance. If you choose a coordinated policy, your health insurance covers certain medical expenses first, and your auto insurance covers the rest. For example, if your health plan pays 80% of a hospital bill, your insurance pays the remaining 20%. This lowers your premium, but it also means you’re subject to your health plan’s rules, such as deductibles, copays, and provider networks.

If your policy is not coordinated, your auto insurance pays accident-related bills in full up to your PIP limit. Only after those limits are exhausted will health insurance step in. For example, if you chose a $250,000 PIP limit and your medical costs total $500,000, your health plan may be billed for the remaining $250,000. 

How PIP Coverage Levels Affect Health Insurance Responsibility

The level of PIP coverage you choose determines how soon your health insurance is billed after an accident. If you buy unlimited PIP, your auto insurance pays for all accident-related medical care with no cap. That means your health insurance is never billed, even for expensive treatments like long-term rehabilitation or surgeries costing hundreds of thousands of dollars.

We already mentioned that when you select lower PIP limits, such as $500,000 or $250,000, your health insurance becomes responsible once those amounts are used up. For example, a traumatic brain injury can cost more than $1 million in medical care over time. If you had a $250,000 PIP limit, your health insurance would be billed for the remaining $750,000. This shift in payment creates extra obligations for you, since your health plan may require prior authorizations, limit which doctors you can see, or apply deductibles.

Drivers who qualify for the $50,000 PIP option face even greater risks. That option is only available if you’re enrolled in Medicaid. If you’re seriously injured in a crash and your bills exceed $50,000, Medicaid takes over, but coverage may not include certain specialists or advanced treatments. Medicare enrollees who opt out of PIP altogether depend entirely on their federal health coverage for accident treatment. 

Situations Where Health Insurance May Cover Auto Accident Injuries

We’ve already reviewed how your health insurance can cover costs that exceed your auto insurance coverage. It can also be billed directly when you’ve opted out of PIP because you’re on Medicare. In that case, Medicare becomes your only source of accident-related medical coverage, and providers submit claims the same way they would for any other illness or injury. This option is only available if you’re enrolled in Medicare Parts A and B, and it places the entire cost of accident treatment on that program.

Other situations include:

• Out-of-State Accidents: Out-of-state accidents may create situations where health insurance gets billed first. For example, if you’re injured while driving through Ohio and are taken to a hospital there, the billing staff may not be familiar with Michigan’s no-fault law. They’ll usually send claims to your health insurance instead of your auto insurer. Later, your health plan may recover those costs from your Michigan auto insurance, but the hospital will have already treated you under your health policy.
• Treatments Not Covered by PIP:  Your health insurance may also cover treatment categories that PIP won’t pay in full. For instance, some auto insurers limit chiropractic care or refuse to cover experimental procedures like stem cell therapy. If you seek those treatments, your health insurance may provide coverage when auto insurance denies payment. This overlap is one of the reasons policyholders need to know both their auto and health plan rules before choosing PIP levels.

Common Exclusions and Limitations in Health Insurance Policies

Health insurance is not guaranteed to cover all accident-related medical bills. Many plans limit or exclude coverage, which can leave you responsible for costs until other insurance pays. Knowing these restrictions before an accident helps you avoid unexpected bills.

• Exclusion Clauses: Many health insurance plans contain clauses that restrict or deny coverage for auto accident injuries. Some policies state directly that accident-related treatment must be billed to auto insurance first. If a hospital mistakenly bills your health insurance, the claim may be denied until proof is shown that your PIP benefits are exhausted.
• Deductibles and Copays: If you have a $2,000 annual deductible, you must pay that amount out of pocket before your health plan begins covering services. For example, if you require an MRI costing $3,000, you pay $2,000, and your health plan covers the remaining $1,000. Copays also apply each time you visit a doctor or specialist, which adds up quickly if you need long-term care.
• Network Restrictions: Network restrictions also create problems after a car accident. If your health plan only contracts with certain hospitals or specialists, you may face out-of-network charges if you’re treated elsewhere. For example, if you’re taken to a trauma center that isn’t in your network, your health insurance may only pay part of the bill, leaving you responsible for the balance.
• Subrogation: Health insurers can require repayment from your auto insurance settlement for bills they paid. For example, if your health plan paid $50,000 toward accident treatment, you can claim that amount from any auto insurance payout you later receive.

Medicaid, Medicare, and Employer Health Insurance in Auto Accidents

Different health insurance programs handle auto accident claims in Michigan in distinct ways. Medicaid, Medicare, and employer-provided plans each have their own rules that affect how medical bills are paid after a crash. Knowing these rules helps you understand what costs will be covered and what limits may apply.

• Medicaid: Drivers on Medicaid can only select the $50,000 PIP option for auto insurance. Once that limit is reached, Medicaid covers further treatment. However, Medicaid may restrict access to specialists, limit the number of physical therapy visits, or deny certain advanced treatments. For example, if you require long-term rehabilitation, Medicaid may only approve a set number of sessions.
• Medicare: People on Medicare Parts A and B can choose to opt out of PIP coverage entirely. In that case, Medicare becomes the sole payer for accident-related medical care. While Medicare covers many hospital and doctor services, it doesn’t cover everything. For example, long-term custodial care and some outpatient therapies may not be included, which can leave you paying out of pocket.
• Employer Health Plans: Many employer-provided health plans are governed by federal ERISA rules. These plans may include clauses requiring repayment if they cover accident-related bills and you later receive a settlement from auto insurance. For example, if your employer plan pays $100,000 for surgeries, it can recover that amount from any auto claim payout. Some employer plans also impose strict network rules, making it harder to see trauma specialists after a crash.

Steps to Take After a Michigan Auto Accident

After a Michigan car accident, you need to follow certain steps to make sure your medical bills are processed correctly. Auto insurers, health insurers, and medical providers each require information in a certain order, and if you skip steps, your bill payments may be delayed or denied. 

• Notify Both Insurers Immediately: You must contact your auto insurer within 24 hours of the crash to open a PIP claim. Hospitals send bills directly to your auto insurance, and if no claim is open, those bills can be denied. You also need to notify your health insurance provider because they may be billed once PIP limits are used, and advance notice reduces delays.
• Keep Detailed Medical Records: Request itemized bills from every hospital, specialist, and therapy provider you see. For example, if you reach your $250,000 PIP limit, showing $250,000 in itemized charges allows your health insurer to accept claims without questioning coverage. Without those records, insurers may dispute who is responsible for payment.
• Review Your Policies: Read both your auto insurance policy and your health insurance plan booklet for coordination clauses. If your auto policy is coordinated, your health insurance pays first, and your auto insurance pays the remainder. If your policy is uncoordinated, your auto insurer pays first up to the PIP limit. 
• Consult a Lawyer if Payments Are Delayed: If your auto insurer or health insurer refuses to pay or delays claims, you may need to take legal action. For example, some auto insurers reject treatment they claim isn’t accident-related, leaving you responsible. Personal injury lawyers who handle Michigan no-fault cases can force compliance with PIP obligations and challenge improper denials from health insurers.

Get a Free Consultation From a Michigan Car Accident Lawyer

Car accidents in Michigan raise questions that go beyond medical treatment. The way your bills are paid depends on the PIP option you chose, the rules in your health insurance plan, and the coverage you had in place at the time of the crash. If your PIP limit is high, your auto insurance pays most or all accident-related bills. If your limit is low or you opted out, your health insurance or even your own pocket can become responsible for large expenses. Taking time to review your policies now ensures you know who will be billed and when.

If you’ve been injured in a Michigan auto accident and have questions about who should pay your medical bills, LegalGenius can review your insurance policies and guide you through the claims process. Our team knows how to challenge improper denials, enforce PIP coverage, and protect your settlement from unnecessary repayment claims. To speak with a Michigan personal injury lawyer, call 1-800-209-4000 or fill out our Ask the Genius™ form today.

Frequently Asked Car Accident Health Insurance Questions

What Happens If I Don’t Have Health Insurance and My PIP Limit Runs Out?

If you don’t have health insurance and you’ve selected a limited PIP option, any bills beyond that limit become your responsibility. For example, if your PIP coverage is $250,000 and your hospital bills total $500,000, the remaining $250,000 will be sent directly to you. Hospitals may place you on a payment plan, but if you can’t pay, they may send the debt to collections or pursue a lawsuit to recover the balance.

Without health insurance, you also lose access to negotiated rates that insurers use to lower charges. For instance, an MRI that an insurer pays $800 for could be billed to you at the full charge of $2,500. This difference makes limited PIP coverage especially risky for drivers without health insurance. The only protection in that situation comes from carrying a higher PIP limit or unlimited coverage.

Can My Health Insurance Deny Claims Because I Was In A Car Accident?

Yes, many health insurance plans have exclusion clauses for auto accident injuries. These clauses state that auto insurance must be billed before health insurance pays. If your hospital or doctor bills health insurance first, your insurer may reject the claim until it sees proof that your PIP coverage is exhausted. This denial isn’t a refusal to cover the treatment itself: it’s a rule about billing order.

You can avoid problems by sending your health insurance company a copy of your auto policy and PIP limit as soon as the accident occurs. Once you provide proof that your PIP coverage is limited or used up, your health insurance is more likely to process claims. If you don’t submit this documentation, you may experience delays in coverage that leave you with unpaid bills for months.

Do I Have To Repay My Health Insurance If I Get A Settlement?

Yes, health insurers can demand repayment through a process called subrogation. If your health insurance pays accident-related bills and you later receive a settlement or judgment from another driver’s insurance, your health plan may claim reimbursement. For example, if your health insurance pays $40,000 for accident treatment and you win a $100,000 settlement, your insurer may require you to repay the $40,000.

This repayment reduces the amount you take home from a settlement. However, the repayment amount can sometimes be negotiated. Lawyers familiar with Michigan auto claims often review settlement agreements to make sure health insurers only recover amounts they are legally entitled to. Without legal review, you may end up repaying more than required.

Attorney Jeffrey Perlman

Attorney Jeffrey Perlamn is the managing partner at LegalGenius, PLLC. He has helped Metro Detroit accident victims recover the compensation they deserve for over 35 years. He believes everyone should have access to justice and the legal system, which is why Attorney Perlman spends his time outside of the courtroom writing informational blogs on the LegalGenius website that are accessible to all.