Types of Auto Medical Payments Coverage

The following are types of Medical Payments (MED-PAY) Coverage that many consumers are NOT aware of. Worth the time to read and subsequently follow-up with your insurance agent. Could save thousands of dollars in the future.

"Non-reimbursable, Non-excess Med-pay" is coverage that many refer to as the last ''true med-pay", and is the type that would have been part of a "full-coverage" package many years ago. There is no repayment obligation by the consumer, and the applicability of coverage is independent of health insurance benefits. It is the most expensive of the medical payments coverage, but the added cost is not, by any means substantial. It is not uncommon for the coverage to cost $ 5-10 per $ 1,000.00 of coverage, over a six-month period. This is the type of coverage that you should have, as a consumer, and what we advise our patients to purchase.

"Reimbursable Med-pay" marks the first in the deviation from the type of Med-pay that was typically provided, and is one level lower on the scale of desired coverage. The reimbursement is described by many names, such as "Third Party Liability", "TPL", "subrogation" or "contractual reimbursement." All of these names have been used interchangeably to detail the concept that the original payor of the bills is due to receive a refund of amounts paid, from settlement or judgement against the responsible party, due to the fact that its policyholder was not at fault for the incident. The way this typically works, is that the med-pay insurer pays the bills as deemed reasonable and necessary, up to the limits of coverage. The insurer then has a claim against the settlement proceeds, or award of judgement, pertaining to the case of the policyholder. Upon settlement or judgement, the policyholder is required to pay the first funds of settlement back to the pay or of the med-pay benefits. This can cause friction between doctor and patient, and may ultimately lead to the possible destruction of the doctor-patient relationship, when it is perceived that the doctor received more money in his pocket than the patient, when the patient "was the one that was injured."

"Excess Med-pay" is the first in a series of coverage that many consumer groups feel represents illusory coverage. "Excess" refers to amounts of medical care that exceed that which the policyholder's health insurance will cover. Because of the status of the law, many carriers are refusing to consider billing above any contractual rate between the facility rendering care, and the health insurer. So, in essence, if you have health insurance and the facility is contracted with the health insurer, there cannot be excess, so therefore you have no med-pay, although you are paying for it. Most excess coverage also carries a reimbursement obligation; therefore, in the event the carrier does pay anything, they receive the amounts they paid as reimbursement. Further complicating this coverage, and giving further support for the allegations that the coverage is illusory, is the fact that without health insurance, many policies are subject to a deductible. Often times, the deductible, or "retention" is 40% of the coverage amount.

"Modified, or Coordinated Med-pay" further represents coverage which may be classified as illusory. The "Modification" or "Coordination" is between the health insurer and med-pay carrier, thus acting as excess med-pay. There is one little difference, separating the two; however, in that it pays only a percentage of the excess amounts, after the policyholder first pays a deductible. The same problems persist as with "excess" coverage, in that if there is health insurance the insurer may refuse to honor any amounts in excess of what was paid by the health insurer.

Caveats to Medical Payments Coverage

Insurance companies have been known to arbitrarily change your coverage from "Non-reimbursable" to "Reimbursable," and from "Non-excess" to "Excess." You should take the time to review any notices sent to you by your insurer, which reflect "changes to your automobile policy" and immediately reject any non-requested changes.

"Always better to have the correct coverage and not need it, than to need it and not have it."