How Medical Bills Are Settled After A Car Accident

Medical bills are often one of the most immediate and overwhelming concerns after a car accident. The costs can increase quickly, from ambulance rides and emergency room visits to ongoing treatments and therapy.

Settling these expenses isn’t always straightforward, as multiple parties—such as auto insurers, health insurance providers, and at-fault drivers—may be involved. Understanding how these bills are addressed is crucial to ensuring you receive the care you need without financial ruin.

Here, we’ll break down the processes, complications, and options for covering medical bills after a car accident.

Who Pays Medical Bills After a Car Accident?

The responsibility for paying medical bills after a car accident largely depends on the specifics of the incident, the insurance policies involved, and the laws in your state. Here are the most common scenarios:

Your Auto Insurance (No-Fault States)

In no-fault states like Kansas (Kan. Stat. Ann. § 40-3107) and New Jersey (N.J. Rev. Stat. § 39:6A-4), your Personal Injury Protection (PIP) coverage typically pays for your medical bills, regardless of who caused the accident.

However, PIP coverage has limits, so if your expenses exceed those limits, you may need to seek compensation elsewhere. It is also important to mention that when the damages typically covered by PIP are severe, and would naturally exceed your PIP limit, you may directly see compensation from other sources, but usually the at-fault driver.

The At-Fault Driver’s Insurance (Fault-Based States)

In fault-based states like California (Cal. Veh. Code § 17150), the at-fault driver’s liability insurance is usually responsible for covering your medical bills. However, this may require waiting until fault is determined and claims are processed, which can take time.

Your Health Insurance

If the costs exceed auto insurance coverage or payment is delayed, you may use your health insurance to cover medical bills. This typically involves subrogation, where your health insurer seeks reimbursement from the responsible party’s insurance later.

MedPay Coverage

Medical Payments (MedPay) coverage is an optional addition to your auto insurance that can help pay medical bills regardless of fault. It can cover expenses like co-pays, deductibles, or treatments not covered by health insurance.

MedPay is optional in most states, but is required in Maine and New Hampshire. MedPay coverage is unavailable in Minnesota, New York, North Dakota, and Oregon.

Out-of-Pocket Expenses

Sometimes, you may need to initially pay out of pocket and seek reimbursement through insurance claims or legal settlements.

7 Reasons Why the Process is So Complicated

The process of settling medical bills after a car accident can be complex due to several overlapping factors:

Determining Fault

Establishing who is responsible for the accident is critical in determining which insurance policy will cover medical expenses in at-fault states or in no-fault states when the victim has suffered significant injury. 

Disputes over fault can delay the settlement process, leaving victims to cover costs in the interim. This is especially common in modified comparative negligence states which are the majority (33 states). 

In contributory and pure comparative negligence states, authorities only have to decide whether the other party has contributed to the accident in any way to deny them compensation, or reduce the percentage of damages they will be entitled to respectively. 

In modified comparative negligence states, they have to determine who is primarily responsible for the accident, which could be very difficult in some cases.

To illustrate, Idaho’s Idaho Code Ann. § 6-801 provides that a person will be allowed to recover compensation if their negligence was not as great as the negligence of the person they are seeking against. 

And in Texas, Tex. Civ. Prac. & Rem. Code § 33.001 refers to it as proportionate responsibility but stipulates that a claimant will only be stopped from recovering if his responsibility is over 50%.

Insurance Policy Limits

Each insurance policy has limits on how much it will pay for medical expenses. If your bills exceed these limits, you may need to pursue additional compensation from other sources, such as the at-fault driver’s personal assets or an umbrella policy.

If you intend to secure compensation by going after the other driver’s personal assets, that may require you to institute legal action or commence a series of negotiations, especially if you are in a no-fault state.  

This process can easily become time-consuming and stressful, especially if you do not have an experienced car accident attorney.

State Laws

State-specific laws, such as those governing no-fault versus fault-based insurance systems, can influence how medical bills are handled. Additionally, statutes of limitations for filing claims vary, adding another layer of complexity.

Some states also have unique requirements for reporting injuries and filing claims, which can impact the timing and resolution of medical bills. 

So, in New York where the insured has to inform their no-fault insurer of the accident within 30 days (N.Y. C.C.R. Law § 65-1.1(b)), medical bills may be resolved faster than in other states without similar deadlines.  

Subrogation Rights

If your health insurer pays your medical bills, they often have the right to seek reimbursement from any settlement or judgment you receive. This process, called subrogation, can be confusing and impact the final amount you recover.

However, state law also affects subrogation because eight states including Connecticut (Conn. Gen. Stat. Ann. § 52-225c) and Virginia (Va. Code Ann. § 38.2-2209) have strong anti-subrogation laws. 

Negotiating with health insurers to reduce subrogation claims adds another layer of complexity to the settlement process.

Ongoing Treatment Needs

Accidents often result in injuries requiring long-term care, such as physical therapy or surgeries. Estimating and covering these future costs can complicate settlements, as insurers may dispute the necessity or cost of ongoing treatments. 

In some cases, victims must seek independent medical evaluations to justify their claims.

Coordination Between Insurers

Multiple insurers, including auto and health insurance providers, may be involved in settling medical bills. Coordinating between these entities to determine who pays what can lead to delays and disputes, especially when policies have overlapping or conflicting terms.

Liens on Settlements

Medical providers may place a lien on your settlement or judgment to recover the cost of the care they provided if you cannot pay when you receive the treatment. 

A lien is a legal claim against the settlement amount, ensuring the provider gets paid directly from the proceeds before you receive any funds.

While liens can help ensure your medical bills are paid, they can also reduce the final amount you take home, making it essential to negotiate lien amounts and understand their implications. But a well-negotiated lien can even help you pay less than your initial medical bill.

Can Health Insurance Be Used to Cover Medical Bills After a Car Accident?

Yes, health insurance can be used to cover medical bills after a car accident, but there are important considerations to keep in mind:

• Primary vs. Secondary Payers: In most cases, auto insurance is considered the primary payer, meaning the relevant auto insurance coverage (e.g., PIP, MedPay, or the at-fault driver’s liability coverage) will be used first. Once these limits are reached, your health insurance becomes the secondary payer.
• Policy Terms and Exclusions: Review your health insurance policy to understand what is covered. Some policies may exclude coverage for injuries related to car accidents, requiring you to rely solely on auto insurance.
• Deductibles and Co-Pays: Even with health insurance, you may still need to cover deductibles, co-pays, and other out-of-pocket expenses. Supplemental coverage like MedPay can help bridge this gap if you have it.
• Reimbursement Obligations: Health insurers often require reimbursement for any accident-related medical costs they cover if you later receive a settlement or judgment from the at-fault party. This reimbursement reduces the final amount you take home.
• Provider Networks and Approvals: Using your health insurance may require you to seek treatment within your insurer’s network or obtain pre-approval for certain procedures, adding another layer of complexity to the process.

Health insurance can provide immediate relief from mounting medical bills, but it’s essential to understand the implications and coordinate with other insurance providers to minimize financial strain. 

It is also advisable that you consult with an attorney who can review your policy, consider the circumstances of your cause, and provide tailored advice on the best approach.

How The Accident Helpers Can Help

Dealing with medical bills after a car accident can be a stressful and complicated process. But, at The Accident Helpers, we can help connect you with experienced car accident lawyers who understand how to navigate the intricacies of insurance claims and medical expenses.

These professionals can protect your rights, help you secure compensation for your medical bills, and manage negotiations with insurers, medical providers, or at-fault parties. Experienced lawyers also have the expertise to address challenges such as subrogation claims and disputes over ongoing treatment costs.

Finding the right lawyer can be challenging, but we make it easy by matching you with trusted attorneys in your area—at no cost to you. Contact The Accident Helpers today to take the first step toward resolving your medical bills and reclaiming peace of mind.