The top question we get from clients is “Who pays for medical bills after a car accident.”
Bottom line: health insurance pays first, then auto insurance coverage sorts out reimbursement.
How this works is tricky, and a good personal injury attorney can guide you through the specifics of your situation.
The Confusion
In the aftermath of a car crash, victims often find themselves overwhelmed not only with their physical and emotional recovery, but also with the financial implications of medical bills. It's hard to know who to trust. Understanding how health insurance, liability coverage, and uninsured/underinsured motorist (UM) coverage work together can provide some relief during this stressful time. Let's dive into how these insurance options work to cover medical expenses following an accident.
Health Insurance: The First Line of Defense for Medical Bills
If you are reading this at a hospital, an administrator might have just told you to hand over your car insurance information because the injury was from a car accident. FALSE. Always, always, always insist on them billing your health insurance. (If you need to fight them in Virginia, tell them it’s required by law! The code section is Virginia Code §38.2-2201. There is not a similar code section helping DC car accident victims, but the DC Court of Appeals has ruled this is the law.
A hospital should not be in the business of deciding who should pay their bills. Hospitals and medical providers want your auto insurance to pay the bills. This is why: when a medical provider is “in-network” with a health insurance company, it has agreed to provide services at discounted rates. That is why you will see an aspirin billed at $50 but reimbursed by insurance for ten cents. Auto insurance carriers have not negotiated reduced rates. So an aspirin billed to Blue Cross gets the hospital ten cents, and the same aspirin billed to Geico gets the hospital $50. Make sense?
It matters to you because auto insurance funds are limited. If all the money is wiped out by crazy medical charges from the hospital, there will be nothing left for you. Bottom line: your health insurance pays first. If they push you, tell them you’re not sure about auto insurance. (Which is true!)
Another reason is that health insurance kicks in immediately. Claims are submitted and approved instantly. Not so in the auto insurance world. After a crash, submit everything to health insurance, pay your co-pays or deductibles like any other bill, and you will be reimbursed later. (If you can’t afford the care you need, call us or send us a message. We can help figure it out.)
Liability Coverage: The At-Fault Party’s Reimbursement for Health Bills
When another party is at fault in a car crash, their liability coverage comes into play. (Personal injury lawyers make sure this happens.) Liability insurance is designed to cover the costs associated with injuries and property damage sustained by someone injured in an accident for which the insured is deemed responsible. Here's how it works.
Coverage Limits: Every liability policy has an amount of coverage which are called limits. This represents the maximum amount available to pay you what you are owed – this includes reimbursement for medical bills, lost wages, future medical treatment, funeral expenses, and what I call life damages – compensation for the stress/pain/frustration of being hurt.
Sometimes there is a type of insurance called “med pay” or “medical payments coverage.” THIS is the kind of insurance the hospitals want to grab at non-discounted rates. If the hospital billed your health insurance, this money is available to the injured party to help with co-pays. (This area is law is complicated and you should talk to an attorney before making this type of claim.)
UM Coverage: Filling the Gap
You have no control over how much insurance the at-fault driver has. You can protect yourself with UM Coverage. It is required in DC. You can waive it in Virginia (but you should not). Clients often ask “Why should my insurance pay? I don’t want my rates to go up.” The reason is easy to understand with an example.
Let’s say Bad Driver Bob crashes into you. (Whether you are driving or a pedestrian.) Bob lives in DC and has the minimum amount of insurance available by law, or $25,000. Your injuries are severe. You have hundreds of thousands of medical bills and will be out of work for 6 months. You’ll need future care and may not be able to work full-time again. $25,000 doesn’t come close to meeting those needs.
This is where UM coverage comes into play. Let’s say you have an auto insurance policy with $1,000,000 in UM coverage. This means your auto insurance company has guaranteed you $1,000,000 in coverage for your injuries if someone hurts you and doesn’t have enough insurance. If Fed Ex is to blame, it will have plenty of coverage. But if you were hurt by Bob with $25,000, your policy is designed to step in and take care of you. (Check your coverage now! You probably need more coverage.)
Understanding the interplay between health insurance, liability coverage, and UM coverage can significantly reduce the financial strain following a car crash. Each type of coverage has its role in ensuring that your medical bills are paid and that you can focus on your recovery without the added worry of insurance gymnastics.
FREE CONSULTATION
If navigating these waters seems daunting, consulting with a personal injury attorney can provide clarity and assistance in ensuring you receive the coverage you deserve. Kitchel Law is here to help. Schedule a FREE consultation so we can help evaluate your situation and see if we can help. Don't worry about any upfront fees because we work on a "no win, no fee" basis.
In the complex landscape of post-accident recovery, being informed about your insurance coverage options is paramount. Remember, your health and well-being are the priorities, and understanding how to manage your medical bills through the various available insurance coverages can make all the difference in your recovery journey.