Chapter 5: Other Insurance

Chapter 5

Other Insurance

Medical Payments Coverage

People often ask what impact collateral insurance will have on their claim. In other words, if there are other insurances that will pay the medical bills, how does that work? Again, it depends. The first medical insurance that we will look at is the easiest to explain. Medical Payments Coverage is a first party insurance that you should carry on your automobile. Medical Payments Coverage (Medpay) pays all of your medical expenses arising from a car accident. No copay or deductible applies. Medpay pays from dollar one and pays all of your accident related expenses until you exhaust the coverage. Medpay also applies if you are at-fault in the accident or if you were in

someone else’s car or if you were a pedestrian or on a bicycle.

All you need to prove to your insurance company when filing a medical payments claim is that you were in an accident involving an automobile and you have medical bills because of that accident. Anything paid under the Medpay portion of your policy will be subject to a subrogation lien. Subrogation is a fancy legal word that means reimbursement. In other words, if you collect $5,000 through Medpay, your Medpay carrier will insist upon being reimbursed from whatever you are able to get from the liability carrier. In Alaska these transactions are typically handled through the insurance companies themselves.

It may occur to you to ask, well if I have to pay the money back anyway, why should I involve my insurance? Well there are a few reasons. First of all, you pay for that coverage and presumably you wanted to use that coverage in the event that you had unexpected medical expenses arising from a car accident. You should use the coverages that you purchase. You will not experience an increase in your monthly premiums, especially since your insurance company will get that money back later, but more importantly, Medpay also will cover deductibles and copays for your health insurance. If you don’t have health insurance, Medpay will likely open the door and allow you to get medical treatment that would otherwise be

denied if you simply had no insurance. Many people think that they can simply point their healthcare provider to the liability carrier for the at-fault driver and their medical bills will be paid. This is almost never true.

The medical provider is under no obligation to accept third-party liability insurance. They also know that they will not get paid until and unless you agree to settle your case. This is a huge disincentive for a medical doctor who likely has a waiting room full of people with Aetna or Blue Cross Blue Shield. Why should they take you as a patient when they know that they have to wait months or even years for you to decide to settle your case before they’re paid?

Medpay bridges that gap and gets you in to see a healthcare provider by promising to pay as the bills accrue.

Additionally, if your claim is worth more than the liability carrier’s policy limits, your underinsured motorist carrier (who is always your Medpay carrier) will likely waive their subrogation right when you file your underinsured motorist claim. If that happens, you don’t have to pay back your Medpay carrier for any money received from the liability carrier. Use your Medpay.

Why should I file with my health insurance when it’s someone else’s fault?

People ask about their health insurance quite often. Rest assured that your health insurance will work very hard to get the money that they paid back from the liability carrier for the at-fault driver. They will submit a subrogation lien just like the Medpay carrier will submit a subrogation lien. What was said above about medical payments goes double for health insurance. If you have health insurance, you can likely go to any healthcare provider that you want to see or that you want to treat your injuries. There will be no penalties or increase in your insurance rates associated with going to the doctor. If you are worried about your health insurance carrier (although it escapes me why anyone

would be worried about their insurance carrier) they will likely get their money back when your case is settled. What is certain is that they will be there ready to collect.

Here is where an experienced personal injury attorney can also find money for a claimant. Most health insurance carriers will greatly reduce their subrogation lien in exchange for money now. An attorney can often negotiate those liens with the health insurance carrier by threatening to take the case to court if there is no reduction in the subrogation lien. Simply put, the insurance carrier will be waiting longer for their money and also taking a risk that the jury would side with the defendant and give nothing. Remember,

you don’t owe anything to the health insurance company until you collect money. If you go to court and lose, then your health insurance carrier loses with you. Most times a discussion on these terms will convince a health insurance carrier to reduce their liens and accept money in the short run. A bird in the hand is worth two in the bush.

Much of what was just said about health insurance will also apply to government assistance.  Medicaid and Medicare will typically reduce their liens, but they will also serve to get you in to see the healthcare practitioner of your choice, particularly medical doctors. Furthermore, because there is already a negotiated discount for Medicaid and