Medical Payments Coverage, or ‘Med Pay’, is an optional coverage that every driver should have on their insurance policy. While it is not required in the State of Illinois, it is a good idea to have it. Med Pay pays the medical bills of a driver and their passengers following a car accident, regardless of fault, up to the coverage limits of the insurance policy. Don’t wait until after you have been in an accident to buy Med Pay coverage or increase your limis. You will be stuck with whatever is in place at the time of the accident, which is rarely enough.
Given skyrocketing health care costs, it is best to have as many options as possible available after being injured in a car accident. Each source of insurance has its own advantages and rules that go along with using it. Med Pay is just one of the options that you should have available in case you need it.
Simply put, Med Pay is a way of making sure that medical bills are paid and can be used in the following situations:
- Minor accidents when its not worth the hassle of suing the other driver or dealing with their insurance company
- An accident that was your fault
- Accidents with a driver who didn’t have insurance (though Uninsured Motorist Coverage will likely provide you much more coverage)
- Hit and Runs Accidents
- While waiting for a claim or lawsuit against the at-fault driver to be resolved
Using Med Pay Coverage While a Claim is Pending Against the At-Fault Driver
Here is an example of how Med Pay might work if you are hurt in a car accident that was not your fault. Let’s say that your car is hit in the intersection when another driver goes through a red light. You incur $20,000.00 worth of bills, between the hospital and doctors. You submit the bills through your health insurance first, as you should. But between deductibles, co-pays or uncovered services, you are still left with $10,000.00 worth of out of pocket expenses. If your Med Pay coverage has a $10,000.00 limit, all of your bills are now covered, even though it was the other driver’s fault. Unfortunately, many Med Pay policies only provide for $5,000.00 limits, in which case you would still be left with a $5,000.00 bill. Obviously, this is still better than having to deal with a $10,000.00 bill. Meanwhile, you have filed a claim against the other driver and eventually, you recover enough money to cover the medical services you received, in addition to other damages. Med Pay is then paid back, either in part or in full.
Med Pay comes with a “catch”, called subrogation rights. This means that once you ultimately ‘win money back’ from the other driver’s insurance company, Med Pay has to be paid back. This does not mean that you should not use it. It makes sense that Med Pay would be reimbursed if you succeed against the driver who hit you, otherwise you would be ‘double-dipping’. Think of Med Pay as a temporary loan against future recovery against the other driver. If you can’t collect from the other driver, your medical bills are still paid.
Remember, Med Pay can be used for your passengers, too. If you are hurt as a passenger in someone else’s car, find out if Med Pay can help. This is something that most people don’t realize.
Why Use Med Pay if the Accident wasn’t my Fault?
You file a claim against the other driver’s insurance company and wait for them to pay. After all, the other driver ran a red light, you were hurt, and have medical bills to prove it. So why not just send the bills along to the other driver’s insurance company and ask them to pay? Not so fast. The other driver’s insurance company will not cover medical bills as they come due. It could be years before they pay even a dime related to the accident, unless you are willing to take a quick (and often, very unfair) settlement. Med Pay is a way to keep the bill collectors off your back in the meantime. In other words, Med Pay is helpful in terms of timing, quickly paying your medical providers up to the limits of your policy.
Won’t the hospital or doctor’s office wait for payment after an accident?
Even if your doctor or the hospital know that your medical care was the result of an accident that was not your fault, this does not mean that they have to wait to get paid. Some will agree to wait and will place a lien on your claim against the other driver, but they don’t have to. Med Pay, assuming that there is enough coverage on your policy, can alleviate the stress of having to tell your doctor that it will be a while before they can be paid. Many medical facilities do send people into collections for unpaid medical bills. It is nothing personal, but is a matter of business.
Understanding your own Med Pay Coverage
Med Pay coverage may not be enough, especially if you are involved in a serious accident. It is a good idea to look into increasing your limits, especially if you don’t have a lot of money in savings to cover an unexpected accident (and aren’t accidents always unexpected?) Many people only have $5,000.00 worth of coverage, which doesn’t even begin to cover the Emergency Room bill in many cases, especially when X-Rays or other diagnostic tests are performed. If you aren’t sure if you have Med Pay, check the Declarations pages of your policy. This is normally a cover page listing what your policy covers and how much coverage you have per category. Med Pay coverage is not very expensive and is a nice cushion to have in case you ever need it.
Navigating the various forms of insurance after a car accident can be one giant headache. Depending on the severity of your injuries, it might make sense to seek out legal help- especially if you are juggling many bills from several different health care providers.