Medical Bills from a Car Accident: Who Pays?
When you get injured in a car accident, the medical bills can add up fast. A trip to the hospital in an ambulance and an evaluation by emergency room doctors can turn into thousands of dollars’ worth of medical care. Those bills will be addressed to the person who received the services and that person is responsible for their payment.
But it doesn’t mean payment of medical bills will be an out-of-pocket expense for someone who has been injured. Insurance companies are often required to pay medical bills. The timing of bill payment may vary depending on the type of insurance coverage and the payment priority between applicable policies.
Even when there is no insurance to pay medical bills, there may be other ways to reduce or eliminate an injured person’s responsibility for the cost of medical treatment.
Insurance that May Pay Medical Bills from a Car Accident
Someone who is injured in a car accident may have several insurance policies that can provide coverage for the medical treatment received. Whether or not a particular policy will cover a medical bill depends on the language of the policy and the other potential sources of payment.
Health Insurance
Health insurance will provide coverage for injuries received in a car accident but restrictions may apply as to the type of medical provider or treatment that is authorized. Coverage won’t usually apply until a deductible amount has been reached which means some bills may have to be paid out-of-pocket. Some health insurance will also require a co-pay each time a medical provider is seen.
Auto Insurance Medical Coverage
In California, drivers can elect to purchase optional first-party medical coverage as part of their auto insurance package. Medical payments coverage (Med Pay) applies per covered person and covers the immediate family of the insured when they are injured in the covered vehicle and in the following situations:
- As a passenger in another person’s vehicle
- As a pedestrian
- While using public transportation
Med Pay coverage limits start at $1,000 per person and can be $5,000, $10,000, or higher. Med Pay coverage applies no matter who was at fault and has no deductible or restrictions on medical treatment.
Auto Insurance Liability Coverage
When another driver is responsible for causing the car accident, that driver’s auto liability insurance may ultimately end up paying for the cost of medical treatment received by injured persons. However, no payments will be made until after a settlement or verdict is reached so medical providers would need to agree to wait if other means of payment are not available.
Which Insurance Company Pays the Medical Bills?
Since insurance companies aren’t fond of relinquishing money, insurance policies often include provisions detailing the priority of available coverage. Insurance may be underwritten to apply as primary or secondary when more than one policy potentially covers the same risk. Primary policies are the ones that must pay out first. Secondary policies usually pay out after primary coverage limits have been exhausted.
Insurance Company Right to Reimbursement for Medical Bills Paid
The right to subrogate – or step into the shoes of the injured person – to recover the amount paid for medical bills is a standard provision in auto insurance policies. Subrogation is how an insurance company can recoup benefits paid when another party is legally responsible for the losses.
After a car accident, an injured person may make a claim against their Med Pay coverage for the cost of medical treatment. If another motorist is liable for causing the car accident, the Med Pay insurer may have the right to be reimbursed from the proceeds paid by the at-fault driver’s insurance company.
Options for Medical Bill Payment When You’re Uninsured
When there is no Med Pay or other health insurance coverage available to pay medical bills, a person injured in a car accident will have to work out some type of payment arrangement with their healthcare providers.
California’s no-cost or low-cost Medi-Cal health insurance coverage is available to California residents who meet qualifying age, disability, or low-income requirements, and the coverage can typically be applied for with a phone call.
If someone else is responsible for causing the injuries being treated, some medical providers will agree to put off collecting on their bills until liability payments are made by the wrongdoer’s insurance company.
Medical Liens
Medical liens give lienholders the right to collect payment for medical bills from the proceeds of a personal injury claim. The liens are typically contracts between healthcare providers and patients who otherwise cannot afford to pay their medical bills. These contracts give the providers the right to collect their fees directly from any settlement or judgment awarded to the patient.
Medical liens are based on the assumption that the patient will be successful with the injury claim and the funds necessary to pay the medical expenses will be forthcoming. This is something of a legal gamble as there are no guarantees; this should be considered carefully because the patient will be responsible for the debt if the claim is not won.
For recipients of Medi-Cal benefits, the Department of Health Care Services (DHCS) Personal Injury Program attempts to secure reimbursement of benefits paid when a beneficiary makes a personal injury claim against someone else. Beneficiaries are required to notify DHCS when they initiate a personal injury claim. DHCS then decides if it wants to file a lien against a potential settlement or judgment.
Making Sure Your Medical Bills Get Paid
The last thing anyone wants to worry about while they are trying to heal from a car accident injury is how the medical bills are going to be paid. In 2022, unpaid medical bills represented about $88 billion in debt in the U.S. About 20% of Americans have unpaid medical bills that are in collections. Medical debt is the most common debt shown on consumer credit reports.
Consulting a personal injury attorney soon after a car accident can help you identify potential sources of payment for your medical bills. Attorneys can also review medical bills for accuracy and negotiate with providers to reduce or eliminate charges. They can persuade insurance companies to cover contested medical expenses. An experienced car accident attorney will assist with developing a strategy to get your medical bills paid.