Understanding Your Auto Insurance Coverage Part 3: Med Pay

This week, in our continuing conversation about auto insurance coverage, I will discuss Med Pay. Med Pay is a shorthand term for "Medical Payments." The sole function of Med Pay is to pay for the medical care of the policy holder or any other occupant in the covered vehicle if they are injured in an auto accident.

This coverage is usually a part of your auto insurance policy and is generally sold at a level of $5,000. Of course, you can purchase higher levels of Med Pay. Like uninsured motorist coverage, your Med Pay coverage “follows you around” by paying for your medical treatment even if you are injured while riding as an occupant in a different car.

Up until a few years ago, Med-Pay was an optional coverage. On January 1, 2009, Colorado adopted a mandatory Med-Pay requirement in C.R.S. 10-4-635.

MANDATORY MINIMUMS:
Under Colorado law, auto insurance companies must offer to sell you at least $5,000 worth of med pay coverage. In fact, the law entitles you to $5,000 worth of med pay coverage UNLESS you reject the coverage in writing at the time that you purchase or renew your auto insurance policy. The law does not require that all auto insurance policies include Med Pay coverage. It only requires that if you purchase Med Pay, the insurance company must sell you at least $5,000 worth of this coverage.

WHY MED PAY IS VALUABLE—even if you have health insurance:
If you are injured in an auto collision and you utilize your health insurance to pay the medical expenses, you are often required to pay back your health insurance provider for the amount they paid for your treatment if you receive any settlement money or compensation from the at-fault driver. Med-Pay providers, however, are not entitled to any reimbursement from any settlement or judgment money that you receive. Consequently, Med-Pay is like free money with no strings attached if you are injured in an accident. Also, Med-Pay can also be used in conjunction with health insurance to cover your co-pays or deductibles to minimize your out of pocket expenses.

WHY YOU SHOULD TAKE CONTROL OF MED PAY AFTER A CAR ACCIDENT?
Under the Med-Pay statute, insurance companies are required to hold the money from your policy for a 30-day period from the day the insurance company receives notice of an auto accident. For that time period, hospitals and ambulance companies have the sole right to that money. The law is geared towards assuring that hospitals and ambulances are compensated following treatment of a person injured in an auto accident.

After the 30-day period has expired, you can use the money however you wish as long as you use it for medical care. Insurance companies will often stand by quietly and wait to see if you make a claim for Med-Pay. From my experience, it is easy to get the insurance company to turn over your entire Med-Pay coverage by merely asking for it or by submitting a hospital bill showing amounts exceeding your Med-Pay coverage.

Also, you will want to gain control of your Med-Pay coverage following an auto collision. Unlike health insurance companies, which only pay a fraction of the amounts that health care providers bill because of pre-negotiated contracts, Med-Pay does nothing of the sort. Generally, if a health care provider bills your Med-Pay, they get paid whatever they bill.

If you are injured in an auto accident, and you want to get more bang for your buck in paying your medical bills, you need to control how your Med-Pay is paid out. This can be done by submitting your medical bills to your health insurance company and then paying your co-pays or deductibles using your Med-Pay coverage. Also, you can negotiate your medical bills and direct your Med-Pay provider to pay the reduced amount.

CONCLUSION:
Med-Pay is a very affordable auto insurance coverage that you can purchase to help pay your medical bills if you are injured in an auto collision. While Med Pay is not a suitable substitute for health insurance coverage, it can be utilized in conjunction with health insurance to coordinate medical care after an auto accident. If you have any questions about Med-Pay and its use, please call and speak with one of our attorneys today.