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What is MED PAY? And why should I have it?

Med Pay is an optional coverage usually offered by auto insurance carriers (in Nebraska) that covers medical costs related to an automobile accident.  Depending upon the coverage you purchase, it will cover up to a limit of (usually between $1,000 to $25,000 – sometimes more) for each passenger in your car, and fault is NOT a factor in your ability to use this policy.   Medical Payments policies also may cover expenses other than hospital or physician charges after an auto accident, such as: if you are injured as a pedestrian or a cyclist, you need related dental work, or (worst case scenario) funeral costs. 

Important factors you should consider when purchasing Medical Payments coverage:

  • Expense. Usually med pay is relatively inexpensive, but that will depend upon your age, driving record, and other factors. 
  • Time limits.  Find out how long after an accident you can use the med pay dollars.
  • Your health Insurance.  Ideally, Med Pay should dovetail with your health insurance to cover expenses that would come out of your pocket.  If you have great health insurance, you may need less  Med Pay.  If you have a high deductible health insurance, you may want to consider purchasing a higher Med Pay coverage limit.
  • If you do not have any health insurance you should consider a higher Med Pay policy

A great benefit of having  medical payments is that you run all accident related bills through health insurance first, and then use Med Pay for co-pays, deductibles, and uncovered medical expenses.  As a legal representative for an injured party, often I must intercede to make sure the med pay dollars are used correctly.  Health insurance pays health providers at a discount, whereas Med Pay pays bills at a higher rate – so naturally, health providers will want your Med Pay dollars first.

I run into problems where medical providers ask to use Med Pay only and bypass health insurance. Insist on using health insurance first and then Med Pay after health insurance has processed bills.  This issue was the subject of Nebraska legislation in 2013.  

The amendment to Nebraska Revised Statute 44-710.04 states in part:

No health plan and no self-funded employee benefit plan to the extent not preempted by federal law shall assert any contractual rights to the proceeds of any resources purchased by or on behalf of the policyholder, subscriber, certificate holder, or enrollee, including medical payments coverage under a motor vehicle insurance policy, uninsured or underinsured motorist coverage, accident or disability income coverage, specific disease or illness coverage, or hospital indemnity or other fixed indemnity coverage.

This legislation ensures that Med Pay benefits be used for the benefit of the auto insurance consumer – though I often find it necessary to remind the health insurers and providers of this fact.

If you are injured in an auto accident, understanding Med Pay is just one of the factors that may be helpful in your recovery. 

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