Med Pay Coverage

The term “med pay” refers to medical payment coverage, an optional insurance coverage that is offered as a part of your auto insurance policy.  There are different types of coverage, called primary and secondary, and not everybody purchases it, but for those who do it can have important benefits.  If your health insurance coverage does not cover all of your medical bills (for example, you have copays), or the person who caused your injuries does not have insurance or their insurance company is not paying your bills immediately (for example, if there is a dispute as to liability), med pay coverage may provide a means for paying part or all of your medical bills.  Importantly, med pay is based on a contractual arrangement between the insured and the insurance company, so your San Diego accident attorney will have to examine the relevant provision of the insurance contract of the car you were driving or riding in at the time of the accident.

Only Covers Someone Who is an Insured

Med pay is first-party coverage (as opposed to third-party coverage), meaning it is only provides coverage to someone who is an insured.   So it is not available from the insurance company of another negligent driver who gets into an accident with you.  In the case of an automobile policy, it covers the policyholder, occupants in the vehicle, or someone using the vehicle with the owner’s permission.  In business policies, it is an insurance benefit of the insured that provides payment of customers medical expenses to keep their patronage.

How Does Med Pay Coverage Work?

Med pay is a type of supplemental health insurance coverage that is tied to your automobile policy.  Many drivers aren’t even aware that they have this type of coverage until their personal injury lawyer examines their auto policy with them after an accident.  Just exactly how does this type of insurance work?  Well, it depends on whether the specific type of coverage attached to your auto policy is purchase primary or secondary.  Insurance companies typically offer two kinds of med pay: primary coverage and secondary coverage.  Each works a bit differently.

Primary Coverage

Primary coverage usually costs more and provides a higher level and extent of coverage.  With primary med pay, your personal injury lawyer will gather together and submit your medical bills to your auto insurance company and they will pay the bills up to coverage amount.

Secondary Coverage

Secondary coverage costs less and is only available if you have existing health insurance, since the coverage is secondary to your health insurance.  With secondary coverage, the insurance company will pay your deductible, copays and any portion of your medical bills that your insurance company does not cover, up to your total coverage amount.  For example, if you have an HMO health plan, which typically has only copays (everything else is covered), med pay will pay your copays.  If you have a PPO health plan, which typically pays only a percentage (for example, 80% of your bills), med pay will pay the copays and the percentage of your bills that is not covered by your PPO plan (for example, 20% if 80% of your bills were paid by your insurance plan).  As you may have guessed, in addition to seeing your medical bills the insurance company will want to see your HMO or PPO plan policy to determine the extent of its responsibility under the relevant policy provision.

Limited Coverage

Coverage is not unlimited, and in most cases it is a very minimal amount.  With vehicle insurance policies, the maximum amount is usually no more than $5,000.00.   If you have a substantial amount of medical bills or it is anticipated that you will incur a substantial amount of medical bills, your San Diego injury attorney will still need to follow the standard injury law procedures in making a claim demand and obtaining reimbursement of your medical bills from the insurance company in order to cover all of your medical bills.

Can I Cash Out?

Frequently, a client will ask me, “can I cash out my med pay and get paid directly the full amount?”  Usually the answer is “no.”  Insurance companies will not let you simply request a sum of money without documenting your out -of-pocket losses.  Instead, your attorney will have to submit your medical bills to your auto insurance company, and your auto insurance company will need to confirm the type of health insurance coverage you have, such as HMO or PPO, as well as what percentages of your medical bills your health plan is and is not required to pay.  Only after such a review will your insurance company be able to calculate and pay the portion of your medical bills that are not covered by your health plan.  Moreover, in most cases you will not receive a check.  Instead, the insurance company will mail payment directly to your health care providers, unless, of course, you can prove that you have already paid the health care providers.

Reimbursement Required

As a practice matter, med pay seldom results in recovering any additional compensation because the insurance company paying out the benefits will request reimbursement of the amounts paid.   You cannot collect under this type of coverage and then recover compensation for the same medical bills from the negligent party or their insurer.  The only time med pay truly becomes a real benefit is if you are injured at a business establishment.

Injured at a Business Establishment

In some cases, if you were injured in a store or other business establishment, the business owner’s commercial general liability insurance policy may provide for medical payments coverage for customers who have been injured at the business premises.  Businesses usually carry coverage amounts of $10,000.00, or higher. An experienced injury attorney will know which business establishments have med pay coverage, and can investigate and verify the existence of such coverage.  If it exists, your injury attorney may be able to get you cash now, before you even go to treatment or incur medical bills.