Cyclist, Cover Thyself! [More … ]
December 1, 2015 § 29 Comments
Although I generally disdain using this space for anything useful, here’s something useful: Using MedPay insurance to defray your medical bills.
If you get hit by car, you now know (because you religiously read this blog–and by “religiously” I mean “daily,” not “becoming an angry white Christian man and shooting up an abortion clinic”) that it’s a great and inexpensive idea to have uninsured or underinsured motorist coverage.
However, whether you have such coverage or not, once the driver’s insurer admits liability and issues you a check, you have the problem of healthcare insurance liens (and so does your lawyer, and frankly, whose problems are more important–yours or his?). In short, when your healthcare insurer pays for your medical bills after fighting tooth, claw, nail, fang, whip, hammer, icepick, baseball bat, and slingshot, the terms of their agreement with you allow them to assert a lien against the bodily injury settlement money you get from the insurance company of the driver who hit you.
In other words, you finally got them to cover your accident, and your humble lawyer finally dragged a few dollars out of the offending driver’s insurer, and lo! The health care insurance company wants its cut. “After all,” they piously intone, “we paid your hospital bills.”
Now you’re probably thinking, “Like fuck you did. I paid them–it’s called a fuggin’ insurance premium. Why should you have any claim to the money I get from the baddie who mowed me down?”
Answer: Because they have the gold and they write the rules, and California rules say that they can. Don’t like it? Become a major insurance company. I hear it’s a growth business.
If this seems like it sucks, that’s because it does, and as time goes by health care providers are getting harder and harder to negotiate with regarding these liens. Used to be, your savvy lawyer could phone them up and say, “Look here, Mr. Dikbag, I worked my butt off to get this settlement. If it weren’t for me you’d be getting zero, so cut me some slack and reduce your lien.”
They’d hem and haw and do it. Now they still hem and haw, but the reductions aren’t as high, and in many cases they don’t reduce them at all.
It’s often the case, especially when you get hit and your injuries are moderate or minor, that the ambulance ride and the follow up treatment greatly reduce your eventual recovery. In essence, by filing a claim and hiring a lawyer, it can seem like all you’re doing is working for free for the healthcare provider: Getting the driver’s insurer to cut you a check which then gets (mostly) handed over to the healthcare provider. They think it’s great. You (and your humble lawyer) think otherwise.
Since the healthcare insurer has first priority over the settlement check, he gets paid before you, and before your lawyer. Lawyers don’t like that very much, and neither do you.
So although the message might seem to be, “If you’re going to get hit, make it a catastrophic injury and get hit by someone with a billion dollars of coverage,” it isn’t. The message is that there is at least one low-cost way to keep the healthcare provider’s grubby paws off your money so that it can remain in your grubby paws and the even grubbier paws of your lawyer.
Here’s how: Get MedPay coverage added to your auto liability coverage. If your insurer doesn’t offer MedPay, switch insurers. MedPay coverage is an add-on that lets you send medical bills directly to your auto insurer when you’ve been hit by a car. Your healthcare insurance pays zip, and therefore has no lien on your recovery. For small and moderate cases, MedPay coverage is great, and some insurers will offer benefits up to $25,000.
You submit the bills directly to YOUR auto insurance company, they pay you or the doctor/hospital/ambulance directly, and you submit your claim for pain, suffering, and lost wages to the insurance company of the offending driver. When you reach a settlement, your healthcare insurer (Kaiser, Anthem, Providence, etc.) has no claim to any portion that was covered by MedPay.
The other good (great) thing about MedPay is that it kicks in regardless of fault. In other words, you don’t have wait until the mud wrestling match is completed with the offending driver’s insurer to receive the benefits, and in the event you’re tagged as being the one who caused the collision, your MedPay coverage still pays as long as your injury isn’t covered by worker’s comp.
One added note about MedPay: In some states, and California is one of them, MedPay does have a right of reimbursement in the event you are “made whole” by your settlement. Although it’s beyond the scope of this blog post to discuss the “made whole” doctrine, even a MedPay insurer may be able to claw back some of its payments from your settlement. In any event, MedPay gets you paid more quickly and will cover co-pays and other out of pocket expenses that your healthcare insurer will not.
Be sure to check the policy for exclusions, reimbursement rules, and read the fine print; every insurer’s policy is different.
So before you lawyer up, MedPay up.
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For $2.99 per month you can subscribe to this blog, or you can get some MedPay coverage added to your auto liability coverage. You know which one I’d recommend. Click here and select the “subscribe” link in the upper right-hand corner. Thank you!
Cycling in the South Bay 
What’s that two, no three useful articles this year ? And no serialized stories ! You Suck ! Oh, and heal fast, get well, yada yada.
When you get old, you suck even worse. Fact.
I dunno, false teeth and all that.
But less throat and jaw muscle strength
What’s what two, no three useful articles this year ? And no serialized stories ! You Suck ! Oh, and heal fast, get well, yada yada.
Is MedPay only in California?
Nope.
Thanks for the tip, WM! I hope you’re healing quickly.
Ballsack slowly returning to normal.
This works anytime you get hurt even close to a automobile.
I was roofing a house and had been climbing up and down ladders all day with bundles of shingles. I drove home and as I was stepping out of my car, I felt my knee twist a little. Then it swoll up like crazy.
I called my insurance agent and she said I needed to file with my auto insurance first. I did and they paid for the MRI and Ortho visit. No deductible, nothing.
I heard the same story of a friend that was working on his car. Threw a disc in his back. Auto insurance first, medical insurance 2nd.
So, if you slip in your driveway, makes sure you’re touching your car while doing it.
Great advice!
Seth,
Thank you so much for this post. I had no idea.
That’s enough real content. More kimchi diets or I’m a gonna….
Ballsack post in progress.
a nit- In many states that are not California the Med-PAy carrier has a claim on any settlement proceeds just like a health care insurance carrier. This nit doesn’t mean don’t get med-pay by all means do its pretty cheap (and also get the most underinsured and uninsured coverage you can afford). It just means YMMV as far as what you have to pay back. Insurance companies have good lobbyists that help them protect their big piles of cash
I’ve updated the post to reflect reimbursement rules for MedPay. Bottom line is to always read the fine print of the policy.
Seth, as you know the trendsetters in the Delay, Deny, Defend-What You Actually Want Us to Pay What We Promised-Industry (that is Allstate and State Farm) is to claim that they only have to pay med pay in the ‘reasonable amount’ of any provided medical service. And this by Allstate has now been determined to be whatever Medicare would have paid, if the person had Medicare. Now, of course the hospital won’t take that amount in full payment… . Or as you wrote, I paraphrase, “they didn’t get all the gold in California by paying claims.”. I think that was a song but the vault is now not a bank in Beverly Hills.
But fortunately, I just fix traffic tickets for a living; but meter maids are getting harder to buy off. My technique is to hang out and when the meter maid starts to write a ticket I offer to feed the meter. Or sometimes I just sit outside and make deals with the parkers so that when a meter maid appears I whip out and feed the meter and take only a portion of what the fine would have been. But it beats advertising that “if you are hurt I’ll get you a really big check really fast.’
What about, “If you are hurt it’s going to take a long time and probably won’t pay for that new place in Maui, although it will definitely be good for a couple Starbucks cards and a tire.”
Does MedPay help if you have Kaiser?
MedPay can be used, if it’s part of your auto insurance policy and if your insurer accepts your claim, regardless of who your health care insurer is. I can’t advise whether or how much MedPay will claw back, if any, as it’s state/fact/law/policy dependent. However, if you have it and your auto insurer accepts the claim, they will generally quickly pay any out of pocket costs such as co-pays which, of course, Kaiser doesn’t cover as by definition a “co-pay” is that which you and not they are responsible for.
NOTE: THIS IS A GENERAL STATEMENT OF THE LAW AND IS NOT ADVICE OR A RECOMMENDATION FOR YOUR PARTICULAR MATTER.
This explains all the letters from my health insurance asking about my car insurance when I had a bicycle falling off incident. If only that had been an option on my docs’ forms, instead of “accident”.
Yep, once they find out it was a collision they are on it like stink on shit.
I think there was a way of not paying back the health ins. Company. I.think in the case of my accident they asked at some point and I said no way Jose. California has some way around it.I.think
If you push it hard you can get a reduction, sometimes down to zero. But they are legally entitled to reimbursement as long as you were “made whole.” Good for you, though!
[…] idea. Cycling in the South Bay recommends adding MedPay to your auto insurance coverage, in addition to the uninsured motorist coverage we’ve discussed […]
Excellent tip! Just upped my MedPay coverage to $25k on both vehicles. Cost me a whopping $15/year more. No brainer.
Excellent!
[…] Make sure you have ample MedPay on your car insurance policy. Read Seth Davidson’s explanation on this https://pvcycling.wordpress.com/2015/12/01/cyclist-cover-thyself-more/ […]
Finally taking action on this, almost 3 months after the post.
I was not planning on a collision during that time.
Anyhoo, I inquired to my Allstate agent about MedPay. It turns out that the “Medical Payments” coverage on my current auto policy amounts to MedPay, and is good for $5K of expenses, which I can increase to 10K for $2 per month.
Bargain. And keep planning on not colliding. Forever.