What Is MedPay, and Should You Use It After a Crash?

Published April 11, 2011 · Injury Law Basics

Two weeks after a crash on I-675, the emergency room bill arrives: $3,800. Then the ambulance bill, the radiology bill, and the first physical-therapy statement. The other driver's insurer has not accepted fault and is in no hurry to. Your health insurance has a deductible you have not met. And somewhere in your own auto policy is a line you have never looked at: "Medical Payments: $5,000."

That line is called MedPay, and for a lot of injured Dayton drivers it is the difference between keeping the bills current and watching them go to collections while the injury claim works its way toward a settlement. Here is how it works and when to use it.

What medical payments coverage is

Medical payments coverage, or MedPay, is an optional coverage on your own auto policy. It pays reasonable medical expenses for injuries you (and usually your passengers and family members) suffer in a crash involving your vehicle, regardless of who was at fault.

That last phrase is the key. The other driver's liability insurer will not pay a dime until fault is established, and even then it typically pays once, at the end, in a lump-sum settlement. MedPay pays as the bills come in. It is a first-party coverage, meaning your contract with your own insurer, and you do not have to prove anyone was negligent to collect it.

Limits are usually modest. In Ohio, $1,000, $2,000, $5,000, and $10,000 are common. Some policies offer more. The premium is small, and the coverage is well worth carrying.

Does using MedPay raise my rates?

This is the question we hear most. In our experience, a MedPay claim after a crash that was not your fault does not, by itself, drive up your premiums the way an at-fault liability claim does. Insurers rate drivers mainly on fault and driving record. That said, every company's underwriting is its own, and you should read your policy and ask your agent directly. Do not let an unfounded fear of a rate increase keep you from using a coverage you have been paying for.

How MedPay coordinates with health insurance

If you have health insurance, you now have two sources that might pay the same bill, and the order matters.

Some auto policies make MedPay "primary," meaning it pays first and health insurance picks up what is left. Others make it "excess," meaning it pays only what health insurance does not. The policy language controls, and we read it in every case.

There are a few practical reasons to use MedPay before health insurance when you can:

• MedPay has no deductible or co-pay. Health insurance usually does.
• MedPay can pay providers your health plan does not cover, such as a chiropractor or a provider outside your network.
• Many health plans have strong rights to be repaid out of your injury settlement. Using MedPay for the first few thousand dollars can reduce the amount your health insurer later claims back.

Keep in mind that Ohio law allows a jury to hear both what a provider billed and what was actually paid, a topic we covered in our post on billed versus paid medical expenses. How your bills get paid can affect how the case is valued, which is one more reason to plan the sequence rather than letting it happen.

Will my own insurer want its MedPay back?

Many Ohio auto policies contain a subrogation or reimbursement clause giving the insurer the right to recover MedPay benefits out of any settlement you receive from the at-fault driver. Whether and how much your insurer can actually collect depends on the policy language and on Ohio law, which generally protects an injured person from having to repay an insurer until the injured person has been fully compensated.

This is not something to resolve on your own at the end of the case. The right time to deal with a MedPay reimbursement claim is during settlement negotiations, when it can be negotiated down, and when the amount you are being asked to repay can be weighed against the amount being offered. We treat it as part of the case, not an afterthought.

Make the claim properly

Last year the Supreme Court of Ohio reminded policyholders that a lawsuit against your own insurer cannot be the first time you ask for a benefit; you must actually present the claim under the policy first. We wrote about that decision in our post on Kincaid v. Erie. The same lesson applies to MedPay. Notify your insurer of the crash promptly, submit the bills with a simple written request for medical payments benefits, and keep copies. Most policies also require that treatment be received within a set period after the crash, often one to three years, so do not sit on the bills.

MedPay is also only one of the first-party coverages on your policy. The other, and the one that matters most in a serious injury, is uninsured and underinsured motorist coverage. If the driver who hurt you has little or no insurance, UM/UIM is where the compensation for a serious injury comes from, and we explained how it works here. Check your declarations page for both.

What this means for you

• Look at your auto policy's declarations page today, before you need it. If there is no medical payments line, call your agent and add it.
• After a crash, open a MedPay claim with your own insurer right away. It pays regardless of fault, and it pays now.
• Send us the policy. We will tell you whether MedPay is primary or excess, what the reimbursement clause says, and the best order in which to run the bills.
• Do not let bills go to collections while you wait on the other driver's insurer. Unpaid balances damage your credit and your bargaining position.
• Remember that MedPay is the small coverage. If your injury is serious, the UM/UIM coverage on the same policy is the one to protect.