Auto Accidents: Health Insurance Billing

If you've been injured in a car accident, you may be worried about how to pay for your medical treatment. The good news is that, yes, you can use your health insurance to cover the costs of your injuries. In fact, it's recommended that you do so, as this is the best way to ensure you get the medical care you need without delay. Your health is the top priority, and your insurance is there to help cover your treatment costs. It's important to note that you may need to pay a deductible or co-pay, and your health insurer may have the right to reclaim costs from you if you receive money from the at-fault driver's insurer.

Depending on the state you're in and your specific coverages, your auto insurance policy may also cover accident-related injury costs. If you have MedPay or PIP coverage, for example, these can help pay for your medical expenses. If you don't have health insurance, don't delay getting the necessary medical treatment. Hospitals and care providers may be legally required to present options such as interest-free payment plans and discounted charges.

Health insurance and car insurance interplay

In a "no-fault" state, your own automobile insurer will pay some or all of your medical bills if you get into a car accident, regardless of who was at fault for the accident, up to the limits of your no-fault coverage. Once your medical bills exceed the state's "no-fault" limit, you're responsible for making sure they get paid. If you have health insurance, your health insurer will pay your medical bills. If you are on Medicare or a state-run health insurance program through Medicaid, those entities will pay the bills. If you do not have health insurance, Medicare, or Medicaid, then you are responsible for working out payment arrangements with your healthcare providers.

In a "fault" state, you will generally be responsible for paying your medical bills as they accumulate. However, some drivers in these states have medical payment insurance coverage (known as "med pay" coverage), which will pay the medical bills of anyone covered by the policy up to the "med pay" limit, which is usually less than $10,000. The same is true of "personal injury protection" (or PIP) car insurance, which operates much like no-fault and med pay insurance. After your bills exceed the "med pay" or PIP policy limits, you will be responsible for paying them. Again, it's important to understand the interplay between your med pay coverage and your health insurance (which policy is primary and which is secondary).

If you have sustained an injury in a car accident and you have applicable auto insurance coverage, you should start a claim. You will work with the adjuster to ensure all necessary bills and records are forwarded to your auto insurer. When you seek medical care related to your car accident, give your healthcare provider your auto insurance information and your health insurance information. The insurance adjuster for your auto accident claim will review the paperwork and ask for more information if needed. They will fully or partially reimburse the appropriate party, or deny the claim.

If you don't have health insurance or car insurance, don't let that stop you from seeking necessary medical attention after a car accident. Laws in your state may require healthcare providers to work with you on a payment plan, and you may be entitled to receive care at a reduced rate.

No-fault states and medical payments insurance

No-fault insurance, sometimes referred to as personal injury protection (PIP), is a system of car insurance laws that requires drivers to use their own coverage to pay for basic medical expenses after a car accident, regardless of fault. No-fault insurance is mandatory in some states and optional in others.

In no-fault insurance states, drivers are normally required to have a minimum amount of PIP coverage to help ensure that people will have coverage to help if they're injured in an auto accident. This coverage is often in addition to auto coverages like bodily injury and property damage.

As of January 2023, there are 12 pure or "true" no-fault insurance states: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah. In these no-fault states, each driver's car insurance provider pays their medical claims after an accident, regardless of who was at fault.

Three of the 12 no-fault states (Kentucky, New Jersey, and Pennsylvania) are known as "optional no-fault" or "choice no-fault" states, where drivers can choose to opt out of the no-fault system.

It's important to note that no-fault insurance only applies to medical bills after a car accident and does not include car repairs. The at-fault driver is still responsible for reimbursing you for vehicle damage through their property damage liability insurance.

In addition to the 12 no-fault states, there are also "add-on" no-fault states, where drivers can purchase no-fault coverage without the strict requirements for filing a lawsuit. These states include Oregon (PIP required) and Texas (PIP optional).

Personal injury protection (PIP) coverage

PIP coverage can help pay for medical expenses for both the policyholder and their passengers, even if they don't have health insurance. It can also provide payments for lost wages, childcare, and funeral expenses related to the accident. In some states, PIP may also cover household services such as house cleaning or yard work, as well as disability and rehabilitation costs.

If the cost of necessary medical care exceeds the auto insurance policy's PIP limits, health insurance may cover the additional expenses. It's important to note that PIP policies have minimum coverage amounts and per-person maximum coverage limits.

When it comes to billing, PIP usually takes precedence over health insurance when paying out a claim. So, if you're injured in an auto accident, your PIP coverage will typically be the primary source of payment, with health insurance acting as secondary coverage if the costs exceed the PIP limits.

Having both PIP and health insurance can be beneficial as they can work together to ensure comprehensive coverage. While PIP covers medical expenses and related costs associated with the accident, health insurance can provide additional protection for any ongoing treatment or unrelated medical issues.

Uninsured/underinsured motorist (UM/UIM) coverage

There are two types of UM/UIM coverage:

• Uninsured motorist bodily injury (UMBI) coverage pays for medical bills for both you and your passengers if the other driver is uninsured.
• Uninsured motorist property damage (UMPD) coverage pays for damage to your vehicle if the other driver is uninsured.

In addition, underinsured motorist bodily injury (UIMBI) coverage pays for medical bills if the other driver doesn't have enough insurance, and underinsured motorist property damage (UIMPD) coverage pays for vehicle damage in the same situation.

UM/UIM coverage is especially important because, if you don't have it and are in an accident with an uninsured or underinsured driver, you could end up paying for medical bills or vehicle repairs out of pocket. Even if you file a claim against your own policy, you may have a large collision deductible or not enough coverage to pay for all your expenses.

UM/UIM coverage also provides benefits that health insurance won't, such as compensation for pain and suffering and lost wages. It typically costs only about 5% of your annual auto insurance premium, so it's an affordable way to get added protection.

Reimbursement to insurers

If you've been in a car accident and are injured, your health insurance will usually cover your medical treatment. However, your health insurance provider may seek reimbursement from the at-fault driver's auto insurance company, or from the driver themselves if no legal claim is pursued. This process is known as "subrogation".

Subrogation is a way for your insurance company to recover the money they paid on your behalf by going after the responsible party or their insurance. After an accident, the injured person's health insurance is billed and covers the costs of their medical treatment. If the health insurance company discovers that the accident was caused by another person or entity, they will initiate the subrogation process to determine if any portion of the auto insurance policy can cover these medical bills.

The health insurance company will first notify the insured individual about the commencement of a subrogation investigation and request detailed information about the incident and any other parties involved. They will then evaluate the information to determine responsibility for the accident and identify which party or insurance entity might bear the obligation for the medical expenses. If the health insurance company is not found liable for the insured's medical bills, the subrogation claim concludes. Otherwise, the claim advances to the next stages.

The health insurance company will then reach out to the auto insurance provider of the party deemed at fault and lay out their claim, detailing the medical expenses they have covered on behalf of their insured. This initiates a negotiation between the two insurance entities, where they deliberate on the specific amount that should be reimbursed. The objective is to reach an agreement that ensures the health insurance company recoups funds appropriately while the auto insurer fulfils its financial obligations.

It's important to note that the amount reimbursed to the health insurance company is typically reduced by any deductible paid by the insured individual. Additionally, if the insured individual has paid a deductible for their medical treatment, they are usually entitled to reclaim this amount from their insurance company once the responsible party's insurer acknowledges liability and pays for the medical expenses.

While most insurance companies favour settlements over litigation, there may be circumstances where a subrogation process can lead to a car accident lawsuit. For example, if the health insurance company is seeking reimbursement and the at-fault driver's auto insurance company refuses to pay, the health insurer might choose to sue. In this case, the insured individual could be involved as a witness or as the subject of the lawsuit.

Frequently asked questions