Not long after an accident, a victim starts to panic. Who will pay all of the bills associated with medical treatment? As mentioned in Chapter 2, the at-fault driver’s insurance won’t pay for anything until treatment has ended; there is no “pay as you go” option. In fact, the payment process can be long and involved. In the meantime, you have to heal. What is the best way to manage the expenses of the treatment process?
Often, when a victim checks into a hospital after a car accident, he gives the hospital the other driver’s insurance information. Hospitals take that information but they can’t do anything with it. So, essentially, you’re not covered for the medical treatment they’re providing.
Also, since Colorado is a tort-based system, the at-fault driver’s insurance won’t pay for anything until all expenses are settled, which can take a very long time. Then, they will pay in one lump sum. In the meantime, your bills are piling up, you’re receiving calls from collections agencies, and your credit score is dropping.
Therefore, if you have health insurance, use it!
It may seem counterintuitive. You may think, “Why should my insurance pay for injuries caused by someone else?” There are two responses to that question. First: That’s why you have health insurance in the first place. Second: Your health insurance may have the right to get paid a portion of what they spent to get you well from your settlement with the other insurance company. The health insurance company’s right to get paid back is called subrogation.
Also, there’s a new trend in healthcare payments: In the case of accidents, when a patient is the victim of someone else’s negligence, some hospitals are electing to sit on all medical bills until a settlement is reached. The healthcare providers even assert a lien on the case, hoping to get paid later from the other driver’s insurance company. They are willing to wait because they think they might make more money for the services that they provide. This also happens in Medicare cases because healthcare providers generally make much less from Medicare insurance.
This is important to you because these outstanding bills can affect your credit negatively, sometimes for years.
For all of these reasons, it’s important to use your own health insurance after an accident and to make sure hospitals understand that they need to bill your health insurance company.
Let’s consider what you should do in two scenarios: 1) if you’re at fault in the accident and, 2) if you’re the victim of the accident.
In the State of Colorado, If You’re At Fault…
If you’re in a car accident and you are at fault – and if you don’t have health insurance – a hospital will treat your injuries because they must! Then, they will send you bills for those medical costs. Even though you had no insurance and the accident was your fault, you still have the power to negotiate with the hospital. For example, if your bill is $10,000, you may ask them to reduce it to $8,000 or even $5,000. But don’t negotiate unless you’re willing and able to pay.
Here’s a little-known secret: You can negotiate with hospitals to reduce your bills.
In the State of Colorado, If You’re the Victim…
If you’re a victim in an accident and you don’t have health insurance, the hospital will treat you and bill you as normal. You or your lawyer must contact the hospital and ask them to delay billing and collections until the case is settled. Additionally, you still have the right to negotiate with the hospital to reduce your bills. In the end, the hospital will be paid out of the gross settlement collected from the at-fault driver’s insurance company.
Additionally, there is another option if you’ve been hurt and it’s the other driver’s fault: medical treatment through a local medical lien company. Here’s how that works…
When it appears that the at-fault driver has adequate insurance coverage, your attorney may recommend that you receive treatment through a medical lien company. These companies function much like a healthcare PPO in which you are provided with a network of doctors and healthcare professionals that will administer the treatment that you need. When you receive care in this fashion, the medical lien company pays for all of your medical bills up-front and then creates a lien on the final settlement from the at-fault driver’s insurance company. This step may help to protect your credit as it also saves you the time and frustration of dealing with a hospital’s billing department.
Medical Payment Coverage, also called MedPay, is a premium that your car insurance company must offer you. In fact, in order to forfeit the coverage, you must sign a waiver. The value of the coverage can range from $5,000 to $25,000.
What does MedPay do?
This coverage can be used to pay for first responders, such as ambulance companies. It also covers emergency room bills or any other medical bills related to your injury as a result of your car accident, whether or not you were at fault. It can cover co-pays, deductibles, doctor visits and therapeutic treatments such as chiropractors, massage therapy and physical therapy. In essence, it may cover a lot of things that your health insurance may not!
Do not waive this coverage! Think of it as another layer of protection.
A note of caution: If you ever end up working with an attorney who wants to take a cut of your MedPay coverage, look for a new attorney. That is an unethical practice and you should not forfeit that money.
The important thing that you should take away from this chapter is that you have options and you have more power than you may understand.