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ClaimClinic: Medical Insurance

Next to car insurance, insurance dealing with medical treatment is the biggest insurance issue in your claim.  You may have access to one or more of the following options to pay for your medical treatment.  Each has its own advantages and disadvantages.

Medical Payments Coverage

Some people have Medical Payments coverage, or MedPay.  If you are unsure, you need to request and look at a copy of your car insurance’s Declarations Page.  MedPay will pay for your medical treatment regardless of fault.  This is a kind of cheap health insurance and usually only covers a couple of thousand dollars.  One trick is to use your MedPay to pay your deductibles and co-pays if you have health insurance.  That way you are not out-of-pocket any money for your treatment.

You may need to pay back (i.e. reimburse) your insurance company what it has paid on your behalf if you collect a settlement from the at-fault driver.  Your insurance policy will control whether this is the case.  If an adjuster or some other administrator is saying you need to pay it back, make them show you the provision in your insurance policy that says you have to.

For those of you who are extremely detail oriented and proactive, you can also obtain a copy of your health insurance policy.  Compare it with your MedPay coverage to see if one of them does not require reimbursement.  If one does not require it, then use that one to pay for your treatment because it will result in you keeping more of your settlement by not having to reimburse someone for the benefits you received.

Health Insurance

If you are fortunate enough to have health insurance, it is most likely paying for your treatment.  You are almost guaranteed to receive letters and forms from your health insurer asking about your personal injury claim and then demanding to be repaid once you settle.  This is called “subrogation.”

Health insurance subrogation is an extremely complex legal question and you will need to consult a lawyer in your State if you want to fight having to repay.  The issue involves the language in your health insurance policy, which almost everyone has never seen or read.  It also requires a lawyer to inspect both federal law and your State’s laws.

If you end up having to repay your health insurance company, there are a couple of things to keep in mind.  First, the medical expenses in your Demand Package are based on the full value of your medical bills.  The health insurance company only wants the money it paid, which is often less than the face amount of the bill.  This means you get to keep the difference.

Secondly, everything in a personal injury claim is negotiable.  Call the health insurance claims representative and try to negotiate a reduced amount in exchange for a letter saying you paid a reduced amount as full and final payment.  One argument to try is to get them to reduce their amount by a third, telling them you acted as an attorney would in collecting a settlement and they should have to pay the 1/3rd “fee” to recover their money.

If you have MedPay coverage on your auto policy, review your auto policy to see if MedPay gets reimbursed if/when you recover from the other driver.  If it does not, then you may want to use MedPay to pay for your medical treatment before using health insurance.  That way, you don’t have to repay your health insurance company for the money it paid out on your behalf.  You get to double dip on your medical expenses – MedPay pays them and you get paid for them by the other driver without having to repay!


These are federal programs that have the strongest right of reimbursement possible.  You will have to pay them back.  Unlike health insurance companies, Medicare and Medicaid are not that good at finding out about your claim and contacting you to notify you about reimbursement.    There is no legal time limit on when Medicare/Medicaid can come to you for repayment, so you need to be proactive in resolving this.  Just like health insurance, you may try to negotiate down the amount you owe.  Just keep in mind this will slow down the resolution process and also that the federal government has leverage, they don’t have to negotiate down the amount because there is no uncertainty whether they are owed money like there can be when talking to health insurance companies.

If you have received Medicare or Medicaid, you will need to get on the Centers for Medicare & Medicaid Services and follow their requirements for getting and negotiating a payoff amount.

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