Do I have to pay my health insurance back after a car accident?

Do I have to pay my health insurance back after a car accident?

After a car accident, you may be subjected to massive inconvenience caused by a combination of doctors’ visits, mounting medical bills, and time off work. Ideally, at the end of the insurance or litigation process, you will receive ample compensation to be “made whole” from the losses that the accident caused. However, if you are not paying the medical bills out of pocket, you may be wondering whether you need to pay your health insurance back after a car accident. 

The answer is: it varies from case to case. Los Angeles personal injury lawyers deal with this question often because repayment of medical bills often affects a car accident settlement. Your personal injury attorney will determine what bills the insurance company has paid and what it may legally request in reimbursement, and then work to negotiate a settlement so you can receive full and fair compensation. 

Who pays for medical treatment after a car accident? 

It may seem to be a basic question, but first your lawyer needs to know who actually paid your medical bills. The most common sources are: 

  • “Med Pay” – Your auto insurance may contain optional coverage for medical payments, often with a limit of about $5,000.  
  • Health Insurance – When you are injured in an accident, your treatment can be submitted under your health insurance policy just like any other illness. 
  • Self-Pay – If you are uninsured, you may need to work out self-pay arrangements with the medical provider. Some may provide services under the condition that they receive a medical lien allowing them to be reimbursed from settlement or judgement funds. 

You likely have a contractual agreement in place that allows the insurance company or provider to be reimbursed for costs that it pays for your care because of another at-fault party. This is known as subrogation.  

Right of subrogation in California car accident cases 

“Subrogation” refers to the right of an insurance company to recover money that it paid on your behalf for an injury that was caused by someone else. The recovery is meant to come from the party who caused the injury but it will come out of the damages that party’s insurance company pays you. 

How much can the insurance company recover? 

The insurance company will seek to be made whole for what it paid because of the accident, but its right of subrogation is limited in part by California law and by agreements.  

Under California Civil Code § 3040, insurance companies and medical providers are limited in the amount they can recover from the settlement proceeds paid to an accident victim. In a nutshell, they can recover no more than the cost of the medical services (if the bills were subject to a contractual adjustment) or 80% of the value of the services (if the bills were not contractually adjusted).  

The subrogation can also be limited based on the size of the total settlement and whether an attorney also worked to obtain the insurance company’s reimbursement. It is important to know that insurance companies may agree to accept less money in order to help the parties reach a settlement. If you work with an experienced car accident lawyer, they may be able to negotiate a significant reduction in the amount of the insurance lien, possibly saving you 30% or more that may be put toward your monetary recovery. 

Who is responsible for deductibles? 

If you work with a seasoned personal injury attorney, they will likely include your co-pays and deductibles in your claim for reimbursement with the hope of having those amounts included in your settlement. Since the insurance company did not pay these, it cannot recover them. But the out-of-pocket losses you paid should be recoverable from the at-fault party. 

Speak with an LA car accident attorney today 

Obtaining compensation for your injuries after a car accident may seem like it should be a straightforward thing. However, the interplay between statutes, insurance contracts, court rules, and other factors can make the process seem unbearably complex. In these situations, one of the expert Los Angeles personal injury lawyers at Ellis Law can be your light in an otherwise dark tunnel. 

Ellis Injury Law is dedicated to fighting for the rights of personal injury victims. Call today to speak with one of the elite Ellis Los Angeles car accident attorneys and find out about your rights and responsibilities, including whether you should have to repay medical liens. All consultations are free and confidential.