If you are involved in a motor vehicle accident, you probably have many questions, including questions about how your medical bills will be paid. If you were injured in a motor vehicle accident due to the negligence of another person, you may recover your medical bills through a lawsuit. However, it may be months or even years before you receive a settlement or judgment from the negligent driver and his or her insurance company. In the meantime, you need to ensure that your medical bills are covered. How those bills are paid will ultimately affect your recovery.
The first place you will want to look for insurance coverage for medical bills is your own automobile policy. Many drivers are unaware that their automobile policy may carry a certain amount of coverage for medical bills arising from an automobile accident. This amount is usually minimal, but every bit helps. If you reach a settlement with the negligent driver’s insurer, your automobile insurer generally is not entitled to be refunded for the medical bills it paid unless and until you are made whole by the settlement – meaning that you are fully compensated for all elements of damage. In most cases, a negotiated reduction is reached to avoid a separate mini-trial on this issue.
The next place you will want to look for medical coverage is your own health insurance. If you have health insurance through an employer-sponsored plan that is fully-funded by the employer, you may have to pay that health plan back all of the amount it paid for your medical bills regardless of whether you are made whole. These plans, referred to as self-funded ERISA plans, are governed by federal law, which preempts state law concepts such as the made whole doctrine. Some of these plans, however, are insured by a third party. An experienced lawyer will know to research the plan to determine whether it is insured or self-funded and whether arguments can be made in an effort to reduce the amount you are required to refund the plan from your settlement.
Finally, if you are insured through Medicare, the federal government has established a specific formula to calculate the amount that must be refunded. That formula is based on the amount of the settlement or judgment and the amount of legal fees and costs associated with achieving it.
Before resolving any case, it is always important to know what your payback obligations are to third parties that paid for medical bills related to the accident. Having an experienced lawyer involved gives you the benefit of determining what these payback obligations are and how to negotiate reductions where possible to account for the time and effort you and your counsel spent to recover from the negligent party.