The Fourth Most Common Way to Reduce the Value of Your Car Accident Claim or Auto Accident Settlement Is

Not Using Health Insurance or Medical Payment Coverage
when you try to handle your Car Accident Claim or Auto Accident Settlement

If you have private health insurance or government health insurance (Medicaid/Medicare) and you need medical care, you should always give the information to the hospital or the doctor.  There are many reasons to do this.  The first and foremost is that is what the doctors’ offices are comfortable taking.  Their procedures and staff are familiar with health insurance, they know how it works, and they feel like they are likely to be paid that way.  Therefore, they process you just like anybody else and they get their bill paid.  They feel good about it and they feel better about providing you medical care than you are trying to get them to bill the car insurance company.

Also, a doctor is more likely to order a test he thinks you need if he feels there is health insurance in the case.  Doctors become very careful about ordering a medical test that they think you cannot pay for if there’s no health insurance.  If you have health insurance, they know that the bill is going to be paid and they’re likely to refer you out for an MRI, or X-rays, or CT scan, or even blood work if they think you need it.  That’s one reason to provide your health insurance information to them even in an auto accident case.

The second or reason many people don’t want to provide their health insurance information is that they feel like the other person’s car insurance ought to pay for the car accident injuries and their health insurance ought to not have to do so.  I will tell you that when you settle your personal injury or car accident case it is none of the defendants or the person who caused the accident's business whether or not you have private health insurance.  If you have a car accident lawyer or a lawyer who practices personal injury, he will, or he should present the full or face amount of those medical bills to the other party’s car insurance company.  It’s not relevant whether those bills were paid by health insurance, whether you paid them cash, or whether they’re still outstanding.  The face amount of those bills will be presented to the other person’s injury company and they should make a car accident settlement offer based upon those bills.  Once you receive the settlement check, then you will pay those medical bills.  If the bill has been paid by a private health insurance company and nothing is owed to them, that extra money would go to you.If your health insurance is entitled to be paid back, then you would just pay them out of the car insurance settlement.  However, health insurance companies normally do not pay the face amount of the bill.  Almost every time they have negotiated discounted rates for their patients.  The hospitals and doctors give it to them because of the volume of patients those health insurance companies can send them.  Therefore, if you had a bill for $1,000.00 for a doctor and you have private health insurance, your private health insurance might pay them $500.00.  This discount of $500.00 goes away.  In other words, when you pay your health insurance company back you would only have to pay them $500.00, not $1,000.00.  That would be an extra $500.00 in your pocket when you sette your car accident claim.

Do you have to pay your health insurance company back?  This is a question I am frequently asked and the answer is, it depends.  If your health insurance company is an ERISA company, then the answer is most likely.  This is a company-sponsored health insurance plan where your company basically pays into a fund and, if that money is all taken out by injured employees, they have to replenish it.  This is different than regular health insurance where your company buys a policy knowing what the fixed amount is every month.  ERISA repayment is a complicated area and I would caution you against trying to do it on your own without seeking legal advice.

Georgia also has what’s called the "Made Whole Doctrine."  This basically says that if you are made whole, which would represent a jury settlement or a jury verdict, then you have to pay your health insurance carrier back.  If you are not made whole of your economic and non-economic damages, then you don’t have to pay the health insurance company back if they’re non-ERISA.  How do you know if you’re made whole or not?  Basically, any time a jury renders a verdict you’re made whole.  If you engage in a settlement compromise, then you’re not made whole.  This is because the compromise, by its very definition, means that you took less money for one of many reasons.  One of those reasons is "certainty," because you now know exactly what it will be rather than leaving it up to a jury to tell you what your case is worth.  The second is "time"; you took less money now rather than wait to go through the entire legal process, which can take several years.  So, if you receive a settlement offer or a settlement compromise without filing a lawsuit and going to a jury, then you probably do not have to pay back any health insurance company unless they are ERISA-based.  There is one caveat to that, and this is governmental health insurance.

If you are a recipient of Medicaid, Medicare, Peach Care, any other governmental insurance, or Tri-Care, then you most likely have to pay them back for any health insurance costs associated with your car accident.  The federal government and state government operate by different rules than private health insurance carriers.  Since it’s taxpayer money purchasing your health insurance, the taxpayers have a right to be paid back.  They function very similarly to ERISA-based companies.  If you do not pay Medicaid and Medicare the money that’s owed to them, you can be liable for it.  They can sue you.  But more importantly, they can take away your Medicaid and Medicare benefits.  The same goes for Tri-Care. 

Repayment of health insurance is a complicated issue and it’s beyond the scope of this book.  However, that does not mean you shouldn’t use it.  I urge all of my clients who have health insurance to use it for their medical care and treatment, especially in the emergency room and family care doctors, or if they require MRIs or any specialized treatment beyond chiropractic care.  This can represent thousands of dollars that would go in your pocket if you do this correctly.  You shouldn’t worry about the defendant driver getting the benefit of you having health insurance.  The only one who benefits is you and your family.

Some folks also don’t want to use what’s called Medical Payment or Med-Pay coverage that they have on their own car insurance policy.  The same arguments are there.  Why should my insurance have to pay for it?  Somebody else caused it.  If you have Med-Pay or Medical Payment coverage, you pay for that privilege every month.  Every time you write your car insurance check, you are giving them some money for that Med-Pay coverage.  The amounts aren’t usually high, but Medical Payment coverage is there in case you are in a car accident, whether it’s your fault or not.  That’s how that coverage works.  Med Pay falls into the same category as Georgia "Made Whole" rule.  If you are not made whole, you generally don’t have to pay back your health insurance company or Med Pay Provider.  That’s just coverage you bought.  Clients ask me, "Well, will my insurance go up is I use my Med Pay?"  The answer is the law says no.  The law says they cannot raise your insurance rates based upon a No-fault collision.  Therefore, use of Med Pay should not increase your rates and should not cause your insurance company to drop you.  If your insurance company were to raise your rates or to drop you, I would urge you to contact another insurance company.  They would then research the accident.  They would see it was a No-Fault collision through no fault of your own, and they would not hold it against you.  I would not want to do business with a company that raised my rates for something that wasn’t my fault in violation of Georgia law.  For that reason alone, I would want to change insurance companies, because it’s probably a signal that if you’re in a collision and you need their help on your own policy, they’re not going to treat you fairly.