The At-Fault Driver's Insurance Does Not Pay Your Bills in Real Time
This is the single biggest misconception accident victims in Alabama have. Most people assume that because the other driver caused the accident, the other driver's insurance will pay their medical bills as they come in. That is not how it works. The at-fault driver's liability insurance pays a lump sum settlement at the end of your case, not ongoing bills during your treatment.
This means that while your case is pending, which can take months or even years, you need another way to pay for your medical treatment. Understanding your options is critical, because gaps in treatment caused by inability to pay can seriously damage your personal injury claim.
Your Health Insurance Should Be Your First Call
If you have health insurance through your employer, the ACA marketplace, Medicare, or Medicaid, use it. Many accident victims hesitate to use their health insurance because they feel the other driver should pay. That is understandable, but strategically wrong. Your health insurance negotiates discounted rates with providers, which means your total medical bills will be lower. Lower bills mean you keep more of your settlement.
Your health insurance company may assert a subrogation right, meaning they will want to be reimbursed from your settlement for the bills they paid. Your attorney can often negotiate these subrogation claims down significantly, sometimes by 50 percent or more. This is one of the many ways an experienced personal injury attorney adds value beyond just negotiating with the at-fault driver's insurer.
MedPay Coverage: Alabama's Hidden Gem
Medical payments coverage, commonly called MedPay, is an optional coverage on your auto insurance policy that pays your medical bills regardless of who was at fault. MedPay is relatively inexpensive and typically provides $1,000 to $10,000 in coverage.
The beauty of MedPay is that it pays quickly, often within days of submitting a bill, and it does not require you to prove fault. In Alabama, MedPay is not subject to subrogation in most cases, meaning you do not have to pay it back from your settlement. This makes it essentially free money for your medical treatment.
If you have MedPay on your policy, use it immediately. If you do not have it, add it at your next renewal. For a few dollars a month, it provides a critical financial bridge during the months your personal injury case is pending.
Letters of Protection: Treatment Now, Payment Later
If you do not have health insurance or MedPay, your attorney can arrange for you to receive treatment under a letter of protection, or LOP. This is an agreement between your attorney and the medical provider stating that the provider will be paid from the proceeds of your settlement or verdict.
LOPs allow you to get the treatment you need without paying out of pocket. However, there is a trade-off: providers who treat on LOPs typically charge their full, undiscounted rates, which can be significantly higher than insurance-negotiated rates. This increases the total value of your medical bills, which can be a double-edged sword. Higher bills can support a higher settlement demand, but they also mean more money comes out of your recovery to pay the providers.
Your attorney at the Law Office of Cody Poe can advise you on the best strategy for managing your medical bills during your case. Call (251) 298-8454 for a free consultation.
Cody S. Poe, Esq.
Personal Injury Attorney
Cody Poe is a personal injury attorney serving clients throughout Mobile County, Saraland, and the Alabama Gulf Coast. He is committed to helping accident victims understand their rights and recover the compensation they deserve.