Have you heard the term “Med Pay?” If not, you’re not alone. But becoming familiar with this term may pay off if you’re ever in an auto accident. Med Pay is short for Medical Payments Coverage. It is an optional benefit on your auto insurance policy, meant specifically for covering medical expenses for injuries sustained in an auto accident.
All drivers are required, by law, to have auto insurance coverage. There are minimum requirements that must be met, which differ from state to state. In California, the minimum a plan must cover includes liability insurance of $15,000 for injury/death to one person, $30,000 for injury/death to more than one person, and $5,000 for damage to property. There are a variety of add-on coverage options that will allow you to customize a policy to suit your needs. Medical payments coverage (or Med Pay) is one of these.
Since Med Pay is not required, many people skip this option in order to save money on their insurance premium. For many who already have regular health insurance, they often see Med Pay as redundant and unnecessary. For others, they view Med Pay as just adding cost to their auto insurance policy. And still others have simply never heard of Med Pay.
It doesn’t matter which group you fall into, if you do not have Med Pay on your auto insurance policy, or just have a minimal amount of coverage, I’d like to fill you in on what Med Pay is and how it really works to your benefit.
How Med Pay Works
If you get injured in an auto accident, the last thing you want to do is worry about your medical care. You want to alleviate the pain, so you can get back to your normal, daily life as quickly as possible. When you have Med Pay, it doesn’t matter whether the accident was your fault or the other driver’s fault, your Med Pay should still cover your medical expenses (and those in the car with you), up to the limit on your policy. Med Pay allows you to get treatment immediately and makes sure your healthcare providers get paid, so you do not have to worry about getting an unexpected bill weeks or months after treatment.
Treatment Without Med Pay
When you do not have Med Pay, it can become more difficult to get the care you need. If the auto accident was your fault, then payment for treatment will be your responsibility. This means you either use your regular health insurance, or you’ll need to pay out of pocket, if you do not have health insurance.
The problem this can create are two-fold: First, depending on your injuries, the health insurance company may delay processing claims until they determine whether or not your condition is a result of an auto accident and whether there may be another insurance company (i.e. auto insurance) that should be responsible for the bills; and second, if you have a limited number of visits for a particular service (e.g. chiropractic) then you will be using up these visits. If you use all your available chiropractic visits on an auto accident injury, and later develop another, unrelated condition, you will no longer have chiropractic benefits to cover these visits and you’ll need to pay out of pocket, until your insurance plan resets.
Third Party Insurance
If the auto accident was the other driver’s fault, their insurance policy will have coverage for the injuries they caused, as this is part of the minimum requirement. This is considered third party insurance. But, if you think, “Hey, it wasn’t my fault, I’ll just use their third party insurance to pay for my medical expenses,” you’ll need to be prepared for a bit of a hassle. The danger in relying on third party insurance is that they can end up denying your claim after you’ve already received treatment and incurred medical expenses.
How does this happen? Well, in order for a third party insurance company to even consider covering your treatment claims, you need to open a medical claim with that insurance company (this is different than the property damage claim) AND they need to accept responsibility for the auto accident: basically agreeing that it was their insured who was responsible for the accident. If you do not have these two pieces of the puzzle, then they’ll deny any bills submitted.
If these are in place, other issues arise when the third party adjuster tries to get you to agree to a monetary settlement up front. We always advise our patients not to sign anything unless they’ve closely reviewed the agreement, or better yet, have an attorney review the agreement. Once you sign off on a settlement, you are essentially closing the case. If you then proceed with treatment and later find out your injuries are taking longer to heal than you anticipated, you may soon run out of the settlement money and will then be responsible for any additional charges you incur. Remember, you may experience delayed symptoms that don’t arise until weeks after the accident. It’s always difficult to determine up front the extent of your auto accident injuries.
And, if the third party agrees to cover your treatment, they will recommend that you proceed with treatment and submit all medical expenses once you’ve completed your treatment. This sounds great, but in reality, it means you’ve already incurred the medical expenses, and many times the insurance company will review the claims and doctor’s notes and may end up denying some or all of the claims, simply stating that they do not believe all the treatment was medically necessary. At this point, any unpaid charges become your responsibility.
Third Party Uninsured Motorist
The worst case scenario occurs when you’re hit by a driver without auto insurance. In this case, they do not have any insurance that can cover your expenses. Your only recourse for getting that individual to cover the cost of your medical expenses will be a law suit. And even in this case, you’re not guaranteed to get a settlement at the end of all the hassle. If you decide not to file a law suit, then you will be responsible for your medical bills using your health insurance or paying out of pocket.
Taking the Worry Out of ‘What If’
When you have Med Pay on your policy, your insurance will cover the cost of the medical expenses, and providers can bill them as you receive treatment, rather than waiting until the end of your treatment plan. Then, your insurance company will seek reimbursement from the third party insurance company. You’ve received the treatment you need, the medical providers have been paid, and the insurance companies just deal with each other.
In our experience, submitting treatment claims to Med Pay is much easier to deal with and less headache for the patient and provider alike. Once you choose to rely, or have no choice but to rely, on the third party to cover your expenses, the hassle increases for both patient and provider, and with it, stress. In fact, it is for that very reason that we often recommend seeking legal counsel if you choose to use the third party insurance. An attorney assures you have someone on your side to help you deal with the third party company.
However, avoiding a legal situation is your best option; and Med Pay is your best ally in an auto accident. The cost of adding Med Pay to your policy is minimal. Depending on the coverage limit you choose, it can be less than $10 per month. In our opinion, that is well worth the peace of mind. If you don’t have Med Pay on your policy, we recommend contacting your auto insurance company to add it today!