Why Should I Use My Health Insurance If the Wreck Wasn’t My Fault?

By: John A. Houghton

One of the most common problems we see with new clients is their reluctance to use their own health insurance for medical treatment related to their injuries. The typical mindset is indignation towards the Defendant who caused the wreck, coupled with the belief that the Defendant’s insurer is going to pay the medical bills piecemeal.

Often, the client will simply give the ER personnel the defendant’s liability insurance information instead of their own health insurance card believing that the hospital will submit the bill to the at-fault driver’s auto insurer.

However, the hospital will not ‘submit the claim’ to the defendant driver’s insurance company. Instead, they will file a lien against the client’s personal injury case in Superior Court, and try to get paid on 100% of the bill after the case resolves.

Increasingly, hospitals are encouraging this practice, and for good reason. The pre-negotiated rates that these providers have agreed to with the large health insurers usually results in payment of only 25-30% of the bill (sometimes even less).

The reality is that the liability insurer for a defendant driver will never pay individual medical bills, and virtually always pays just a lump sum settlement at the conclusion of the case. Again, the liability insurer never pays individual medical bills to the providers. The lump sum settlement at the conclusion of the case includes all hospital bills or liens.

The hospital’s business office knows all of this, but they are continuing to encourage potential injury victims in auto wrecks to list the at-fault driver’s liability insurance as payor instead of the client’s health coverage. Hospitals and medical providers are wagering that they will make more money off your personal injury case by filing a lien instead of submitting the claim to health insurance and taking only 25% of the charged amounts.

The direct result of not using your health insurance is less settlement money at the end of the case. Even if the health insurer is entitled to reimbursement (under ERISA governed self-funded plans, Medicare or Medicaid), the amount paid out of the client’s settlement proceeds to reimburse the plan is far less than a full hospital lien balance. Your attorney is obligated to pay any valid hospital lien that was properly filed – failure to use your health insurance will often hold up the final settlement of your case if liens have been filed.

If you have health insurance and are involved in significant wreck with injuries, be vigilant about using your health plan. The co-pays and deductible are far less burdensome than a large five-figure hospital lien to be paid from your settlement. Find out more at gatruckinjurylaw.com