If you are injured in a car accident, one of your first concerns may be how to pay for medical care. Emergency room visits, follow-up treatment, therapy, and diagnostic tests can be expensive, especially if you are unsure which insurance applies or whether your health insurance will even cover accident-related care.
At the Law Offices of Brent W. Caldwell, we help our clients understand how different types of insurance coverage work after a crash. Below, we break down how health insurance, auto insurance, and medical liens may apply to your situation, and how each can affect your settlement.
Which Insurance Pays First After a Car Accident?
The order in which insurance applies is important. In most California accident cases, insurance coverage follows this typical order:
1. Medical Payments Coverage (Med-Pay) – Your Auto Insurance
Med‑Pay is optional auto insurance coverage in California designed to pay for medical expenses from car accident injuries, whether you were at fault or not. However, how it applies in relation to your health insurance depends on the details of your specific auto policy.
In many cases, Med‑Pay serves as primary coverage, meaning it pays medical bills first, without deductibles or co‑pays. However, some auto insurance contracts designate Med‑Pay as a secondary layer of coverage, triggering only after health insurance has paid. Under that scenario, Med‑Pay reimburses things like deductibles, co‑pays, and other out‑of‑pocket costs.
Whether Med‑Pay is primary or secondary depends on the details of your specific policy and coverage may vary from one auto carrier to another.
If your Med‑Pay policy includes a reimbursement provision, meaning the insurer can reclaim what they paid if you later recover funds from a third party, then they may seek repayment. Some policies are subject to California’s “Made Whole” doctrine, which limits reimbursement until you are fully compensated for your losses.
2. Health Insurance – If Med-Pay Is Unavailable or Exhausted
If you do not have Med-Pay, or if you use up your Med-Pay limits, your health insurance can step in to cover accident-related care. Your coverage works just like it would for any other medical condition.
You are still responsible for:
- Co-pays
- Deductibles
- Out-of-network costs (if applicable)
However, there is an important catch: if your health insurance pays for treatment related to the accident, it may request reimbursement from your settlement. This process is known as subrogation, and it can reduce the amount you take home.
We work directly with health insurers to review and negotiate reimbursement demands whenever possible.
3. At-Fault Driver’s Auto Insurance – Pays Last
The at-fault driver’s liability insurance is financially responsible for your injuries, but it does not pay right away. Their insurance only provides compensation after your claim is resolved, either through a settlement or court judgment.
This delay is why your own Med-Pay or health insurance becomes so important early in the process.
What About Medical Liens?
If you do not have health insurance, or cannot afford to pay out-of-pocket expenses, you may receive treatment on a medical lien. A medical lien is an agreement between you and a provider where they agree to treat you now and wait to be paid out of your settlement.
Providers who work on lien do not bill your health insurance. Instead, they file a lien and are legally entitled to be paid from your recovery.
We regularly work with trusted lien-based providers across Southern California and help our clients get the care they need without the stress of immediate billing. Once your case resolves, we negotiate the lien amount to help maximize your net recovery.
How Do These Options Affect My Settlement?
Every source of medical payment: Med-Pay, health insurance, and medical liens, can affect how much money you actually receive from a settlement.
|
Type of Coverage |
Do You Repay It? | Negotiable? |
Affects Your Take-Home Settlement? |
|
Med-Pay |
Usually no | No |
No or very little |
|
Health Insurance |
Often yes (subrogation) | Yes |
Yes |
|
Medical Liens |
Yes (paid from settlement) |
Yes |
Yes |
Our office works to reduce liens and reimbursement claims whenever possible, which can make a meaningful difference in your final recovery.
Do You Have to Use Health Insurance?
No, you are not required to use health insurance. In some cases, treating on a lien may be the better option, especially if your coverage is limited, you have high deductibles, or you need care quickly. That said, using your health insurance often reduces your overall treatment costs and keeps more money in your pocket, as long as any subrogation claims are properly managed.
Get Help Navigating Medical Costs After a Crash
Car accident injuries can leave you overwhelmed with paperwork, bills, and insurance calls. You should not have to figure it out on your own. At the Law Offices of Brent W. Caldwell, we take the lead on coordinating Med-Pay, health insurance, and medical liens so you can focus on healing.
If you have questions about your medical coverage after an accident, or how these options might affect your settlement, contact us today for a free consultation. We work on a contingency basis, and you do not pay any fees unless we recover compensation for you.
