Cyclist, Cover Thyself! [More … ]

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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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