After being injured in an accident caused by someone else some people are reluctant to use their own health insurance. I often hear clients ask, “Why should my insurance have to pay, if the accident was not my fault?” This is an understandable question, but the truth is that you are generally better off, especially in Virginia, if you use your health insurance after you are injured in an accident.
- The negligent party is required to pay the full amount of your related medical bills
When you have been injured through no fault of your own in an automobile accident and have to seek medical treatment, the law in Virginia allows you to recover the full amount of the medical bills, not just what the injured party may have to pay out of pocket. For example, if the medical bill from an emergency room visit is $3,000, but you used your health insurance and only had to pay $250, you are still entitled to compensation for the full bill, which was $3,000, even though you only had to pay $250. Acuar v. Letourneau, 260 Va. 180, 531 S.E.2d 316 (2000) and Radvany v. Davis, 262 Va. 308, 551 S.E.2d 347 (2001) are two cases that stand for this proposition.
Keep in mind that your health insurance may have a lien on any recovery based on the amount it paid because you are recovering from a third party. A lien means that your health insurance company may be entitled to be receive a part of your settlement. Even if there is a lien you will still always come out ahead by using their health insurance.
- Health insurance does not pay the full bill, but you may have to
Most health insurance companies have systems that reduce the amount that they have to pay for medical treatment of their insureds. Back to our previous example where an injured party seeks medical treatment at an emergency room and the total bill is $3,000 and they have to pay $250. The way health insurance and the hospital system work is that the health insurance company pays a reduced rate on the remaining $2,750, let’s just say $1,000, and the hospital writes off the remaining balance. Even if the health insurance did have a lien, it would only be for what they actually pay, in this example $1,000, and not for the full amount of the bill. Thus, an injured party who uses their health insurance may have to pay a $1,000 lien out of the recovery, but that is a lot better than having to repay the full amount, if they did not use their health insurance.
- To avoid collection and protect your credit
Medical bills can quickly pile up after an accident. You may not feel like you are responsible for them, but in the eyes of the law they remain your bills until they are paid. The bills may even go into collection and begin affecting your credit. You do not want to make an already bad situation worse by dealing with collection notices, when this could have been avoided by using your health insurance.
Having to use your own health insurance in the wake of an accident that was not your fault can seem unfair, but it is smart and right thing to do. In the end, you will increase your recovery and decrease your stress by using your health insurance.