Tom Diehl April 8, 2020

If you have car insurance and health insurance, I believe it is unnecessary to carry Med Pay, and I can tell you there are times when you definitely don’t want to use it!

In representing people injured in Ohio car accidents for 32 years, I often see scenarios involving insurance coverage that is not financially smart or well thought out.  Let me explain…

Many people pay extra to have Med Pay coverage on their car insurance to pay medical bills incurred from a motor vehicle crash, but if you have health insurance it may be very costly to use this “benefit” for medical bills following a car accident in Ohio.  

How can that be?  Most health insurance companies(think Aetna, Blue Cross/Blue Shield, Medical Mutual, etc.) have negotiated rates with most hospitals, diagnostic facilities, and doctors.   So let’s say you need to go to the emergency room for a broken arm following a car accident and your bills add up to $3500. If your car insurance plan pays it(and hospitals ALL prefer this route), the hospital receives the full un-negotiated amount of, you guessed it, $3500!

Now if the hospital is instead reimbursed through your health insurance company (at the negotiated rate), they may receive something like $1200(these numbers are for illustrated purposes only and do not refer to any particular hospital or insurance company).  

Okay, who cares?  Well, the hospital definitely cares and would much prefer to receive the larger non-negotiated payment of $3500, and you should also care(aside from the societal interest in reducing healthcare costs and not having the hospital get a windfall from your case) because if this accident was not your fault and you receive a settlement from it, guess what you would have to pay back out of that settlement?   You will need to reimburse either the car insurance company or the health insurance company.  

So would you rather pay back $3500 to your car insurance company or $1200 to your health insurance company? 

Ask your agent!  If I have health insurance, why do I need MedPay?  My guess is you don’t need it and you could delete the $100 premium.