Medpay, and Why You Need It
Medpay? What's that?
Medical payments coverage, simply put, is a somewhat-little-known type of insurance coverage!
Insurance policies, as you probably know, can be pretty complicated. They have a lot of moving parts -- some of which can appear to conflict with one another -- and they often feature what I like to call “SAT” words that don’t get used in everyday conversation. Compounding the issue is the fact that one policy will practically always include multiple different types of coverage. You'll see the items that are required by North Carolina law, like liability, uninsured and under-insured motorist coverage; but you might also have a set of optional types of coverage that aren’t required by law; think things like collision and comprehensive coverage options.
So what's medical payments coverage, then?
One of the lesser-known types of optional coverage is called medical payments coverage, or what we often call “Medpay.” Medpay is considered no-fault coverage, which means that it can reimburse an injured policyholder, his or her family, or anyone injured in the covered vehicle for “reasonable and necessary” medical expenses incurred as the result of a car accident; even if the accident was your fault. It follows that medpay can be a major boon for anyone involved in an accident, either as a driver, passenger, or even an at-fault party.
What do I need to do to collect medpay?
Three things must apply before you can collect Medpay. First, you need access to a policy that carries Medpay coverage, either through your own auto policy, a family member’s policy, or the vehicle owner’s policy. Second, you need to have been injured in a car accident. Third, you need to have incurred medical expenses in connection with your injuries. If all three of these items apply to you, then you should be able to collect medical payments coverage for your reasonable and necessary medical expenses.
So what's so great about medpay?
Well, there are a few truly fantastic things about medpay. First and foremost, the fact that you have a pending claim won’t typically prevent medical providers from sending your account to collections if you have unpaid bills (which many injured parties do). Medpay allows you to get those bills paid sooner so that you won’t have to fire-bomb your credit rating or deal with harassment from debt collection companies.
Second, Medpay can help maximize the amount of money that you get to keep when (and if) you reach a settlement. Medical providers who are owed money for services rendered after a car accident get to claim a statutory lien (or right to payment) on any settlement proceeds, up to a set percentage of the settlement amount. By using Medpay, you can sometimes pay these providers earlier and remove them from the “pool” of potential lienholders, meaning that they won’t be able to get at your settlement money later. Even better, Medpay money isn’t considered to be proceeds of a settlement, so it doesn’t count toward the amount that medical providers might be entitled to. Note that this can change if there's an "Assignment of Benefits" in place, which certain providers such as chiropractors will often implement.
Third, medpay is almost universally pretty inexpensive. It's rare for medpay coverage to cost you more than a few dollars a month, and because the benefits can make such a marked difference in your recovery, opting to purchase medpay coverage is something that I always recommend strongly to my clients.
Finally, medpay can be "stacked!" That means that if you're covered under more than one policy that carries medpay coverage, you can recover medpay funds from each of them. So let's say that you're an 18-year-old living with your parents. You've got your own auto policy, your mom's got her own, and your dad's got his own. That's three policies that you're covered under. If each of the three policies carries, say, $2,000 in medpay coverage, you can stack those coverages to get a total of $6,000.
Be aware that this article only covers the main points. For more information, check out the DMV's website here. If you’ve been injured, I highly recommend that you seek the advice of an experienced local personal injury attorney. But knowledge is power, and if you’re hurt and the bills are piling up, it should be nice to know that you have options for paying them. Good luck!