Why You Need MedPay Insurance
Are you wondering whether you need MedPay or Personal Injury Protection? A San Francisco Bay Area attorney explains what it covers and how much you should have to protect yourself in case of an accident.
Your car insurance policy sometimes calls Medical Payments Coverage "MedPay" or "Personal Injury Protection", or just "PIP". This coverage usually pays your medical or chiropractic bills, and possibly bills from other alternative care if you are hurt in a car accident. It pays regardless of fault, so you can go to your chiropractor and have your bills paid even if there is a dispute about who was at fault. It may even cover you if you are a driver or passenger in someone else's car. MedPay coverage on your car insurance is much broader in the kinds of bills it will pay than your health insurance. But it is far more limited in amount. Usually, the amount that your insurance will pay is capped at a certain level you choose, with $1,000, $2,000, $3,000, and $5,000 limits being common.
- I Have Health Insurance. Why Should I Have MedPay Coverage?
Health Insurance does not ordinarily cover chiropractic, and MedPay almost always does. You are not limited to the doctors or type of care you select. You choose the doctor that is best for you. You choose the chiropractor, and can continue as long as necessary to get well, up to the limits of your policy.
Remember, Kaiser or other health insurers are not good at providing care for "soft tissue" type injuries. We get many reports from people who go to Kaiser or their regular MD's who simply prescribe pills or bed rest for these very painful injuries. If you want to get better right away, if you want to end your pain, you will probably want to see a chiropractor or other professional who understands your pain and who is able to help you get over it quickly.
MedPay insurance greatly increases the chances that you will be fully compensated for your injuries. Car insurance companies do everything they can to try to avoid paying full value for your injury. Smaller impact "soft tissue" cases are increasingly difficult to get paid on. MedPay coverage increases your ultimate recovery, because it will cover some, or your entire chiropractic bill. Even if you have "reimbursable" MedPay, you will come out ahead in any settlement.
- What kinds of bills will MedPay pay?
It should pay any bill that is reasonably related to reasonable and necessary care for injuries from car accident. It may even apply if you are a passenger in someone else's car.
Chiropractic or other alternative care bills, or health insurance deductibles and co-pays, or splints, crutches, bandages or any other medical appliances and drugs are often submitted and paid by MedPay. Because your coverage is so broad, you may be tempted to submit all your bills, but have a limited amount of coverage, you must use it wisely. We recommend that you use your MedPay coverage for things that are not paid by your health insurance, like chiropractic bills or other alternative care.
- What Bills Should be Submitted to MedPay?
If you have health insurance, try to submit as many bills as possible to your health insurance. Your health insurance, even Kaiser, will almost always pay for your ambulance, and emergency care at another hospital. DO NOT USE YOUR MEDPAY FOR THE AMBULANCE! Ambulance companies always want to use your MedPay, because they get paid less from your health insurance. But you only have a limited amount of MedPay, and you need to save it for other things not covered by your health insurance. Use your health insurance whenever possible, and save your MedPay for things not covered by your health insurance. Use MedPay for your alternative care such as Chiropractic, and out of pocket expenses, such as co-pays and medications.
- Types of MedPay
The best coverage is called "Non-Reimbursable MedPay"; only a few companies offer such coverage automatically. For other carriers, you must specifically ask for "Non-reimbursable MedPay". This kind of coverage pays your medical bills after an auto accident, and you DO NOT have to pay it back to your insurance company if you get money from the at-fault driver's company. Unfortunately, unless you specifically ask for non-reimbursable MedPay when you buy it, it almost always is reimbursable. CSAA is the only company we know that always provides non-reimbursable MedPay.
- Why Do I Have to Pay Back My Insurance Company?
Most Insurance companies want their money back if you get money from the other driver's company. Most people are quite surprised to hear this, because the reimbursement drastically lowers the amount they net from their settlement. Insurance companies say it is to make rates more affordable, but that is not the real reason. The real reason is that they want to discourage claims. When you try to use your MedPay, they may say, "Well, you'll just have to pay it back". They never inform you that you need to pay it back when they sell it to you. At that time, they focus on how much you need it.
- If My MedPay is Reimbursable, Why Should I Use It?
You should almost always use your MedPay insurance because your doctor will get paid right away for your treatment, and you will get the best care this way. Also, your insurance company will help pay your attorney's fees when the amount is paid from your settlement. Having MedPay coverage increases your ultimate recovery, as shown below.
Consider a personal injury claim with medical bills amounting $4,500, a recovery of $9,000, and attorney's fees of one third, or $3,000. Without MedPay, your insurance pays none of the bills, so you pay $4,500 to the doctor, $3,000 to the attorney, and are left with $1,500.
With reimbursable MedPay, your insurance pays the doctor the full amount of $4,500, but we will be able to negotiate a discount of, at least, one third on the reimbursement to your company. So, your insurance gets $3,000, your attorney gets $3,000, and you get $3,000.
Best of all, if you have non-reimbursable MedPay, your insurance pays your doctor bill, and all you pay is $3,000 to your attorney. You get to keep $6,000.
Non-Reimbursable MedPay is clearly the best kind of medical coverage available on your car insurance. But like any other coverage, it will only help you if it was already in effect before the accident. It will not help to buy it afterwards; you must buy it in advance. Fortunately, MedPay coverage is not expensive. And the difference in cost between reimbursable and non-reimbursable MedPay is very small.
The worst kind of MedPay is the "Excess" type, which only pays if you can prove that you have no health insurance or other coverage to pay your bills. Your doctor must prove you have no other coverage every time he or she sends in a bill. It takes lots of time to send the bill to your health insurance, wait to have it rejected, and then send it to your company. There are always complications and delays. Excess MedPay is always reimbursable, and you should avoid this kind of MedPay if at all possible.
- How Much MedPay Should I Have?
If you do not have health insurance, you should buy the maximum amount available. Even if you have health insurance, think of the chiropractic care you will need if you have a "soft tissue" type injury. The law requires you to have at least $15,000 of liability coverage to protect others. Does it make sense to have less for you? If you have to go to the chiropractor because of a back or neck injury, you can expect a $3,000 to $5,000 bill. If you go to the hospital after the accident, your total bill could be much higher. I believe you should have at least $5,000 of MedPay coverage. I see people with more coverage, such as $10,000 quite frequently.
ABOUT THE AUTHOR: Jack Bloxham, Attorney
Mr. Bloxham has practiced personal injury law for 20 years in the East Bay Area, helping hundreds of people get the best results for their cases. Admitted to the California State Bar in 1986, and the Ninth District Federal Court, Mr. Bloxham is also an active member of the American Bar Association, American Trial Lawyers Association, Consumer Attorneys of California, and the Contra Costa Bar Association. Mr. Bloxham grew up in the Diablo Valley, and attended the University of California, Berkeley, and received his J.D. at John F. Kennedy University.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.