Selecting Your Health Insurer for PIP Option in New Jersey; Why you should never do this in today’s healthcare marketplace.
Years ago, NJ was trying to reform auto insurance and save you and I money when they reformed PIP (personal injury protection), also known as personal injury protection.
If you are injured in an auto accident, PIP is a special insurance that is designed to cover you from traumatic injuries which is paid as part of your automobile insurance payment. It is different from regular health insurance in that is only covers you when you are injured in an auto accident. It is also comprehensive and is designed to allow you to get appropriate care while you have your choice of healthcare provider.
Two changes were made to the New Jersey automobile insurance laws in 1990;
1.Instead of 100 percent coverage which fully covered all of your care to the policy’s limits, it would now be subject to a deductible of $250 dollars and then cover 80 percent of your care in most policies unless you chose higher policy limits. While this sounded like a good idea because it lowered premiums slightly, If you were injured by another driver, you had to pay a deductible and a copayment for each visit. This has increased the amount of lawsuits as people who were injured wanted to be compensated for their pain and suffering, as well as the costs of their care that was the result of someone else’s negligence.
2.The other change was the ability to select your health insurance as your insurer instead of PIP. The health insurance company now had to cover these costs as the primary insurance, and then if the patients benefits were exhausted, the automobile carrier would pay for care up to policy limits.
While this sounded like a good idea in 1990, at a time when health insurance was simple and benefits were plentiful. In today’s high priced healthcare environment of lower visit limits for chiropractic and physical therapy with limited networks, and some companies using third party administrators to limit your care well below your policy limits, it is quite likely you will exhaust your yearly health benefit from the accident, and you will feel the financial pain as you must secondarily bill the automobile carrier for what your health insurer had denied.
If you had an HMO or an EPO and went to your choice of provider who was not in your health plans network, you would be subjected to a much higher deductible from the auto carrier than someone who did not choose the option and the $30 you saved would be eclipsed by the auto carriers pip switch deducible which is much higher than the standard option. PIP switch is inflationary since it puts more stress on the medical insurance system, and increases your insurer’s as well as your costs, rather than using the coverage designed into PIP insurance under our No-fault laws.
What should you do.
- Tell your auto insurer you do not want to have the PIP switch option. This cannot be changed if you were just in an auto accident that just occurred, however, it will affect future accidents.
- Be careful to read the rest of your policy and make sure you are adequately insured. You do not want any nasty surprises if you are injured by another driver in an accident.
- If you have any questions, we are here to help. Please feel free to ask us during your next visit
In today’s environment, taking PIP switch is a poor choice because of the way health care plans are administrated. Health plans are becoming more restrictive and problematic even with relatively simple health problems.
Always choose the lowest deductible PIP medical coverage option so you are well covered in the event of an automobile accident. Remember, insurance is there to protect us when accidents occur, and the best coverage you can afford will be appreciated if the need arises. Also, steer clear of the minimum plan that only covers 15 thousand in medical coverage. A serious accident can very quickly use up your medical under PIP and for a few dollars more, you can have very good coverage under personal injury protection.
This law is specific to New Jersey and unfortunately, lawmakers have yet to realize that this law is a bad deal for most people in today’s healthcare environment.