Should I use my health insurance if the accident wasn't my fault?

Sometimes, when accident victims visit the hospital, Hospital representatives tell you not to use your health insurance. Be careful!  In some states, like Arizona, this can be a big mistake.

First and foremost, you have to understand that hospitals do not wait for their money. If you don’t use health insurance, there is a good chance that they will bill you personally no matter whose fault the accident was. That is reason enough to be sure to use your health insurance. However, and more importantly, having health insurance is a big benefit to an accident victim especially in states like Arizona.  Keep in mind, the hospital will not investigate how a crash or accident occurred.   That is not their job, and hospitals really do not care whose fault the crash was. Regardless of fault the hospital will want to get paid. Sometimes, when a motor vehicle accident happens, it takes time to generate a police report. Sometimes that report is not generated for several weeks. And even though the accident was not your fault, the hospital will likely and quickly request payment. They will not wait for a police report to be generated. Therefore, if you have health insurance, the hospital essentially receives payment or hold the account from collections because it is anticipating payment through your health insurance. Therefore, even if the police report has not been generated, your account is in the payment process and avoids collections when you use your health insurance. Later, if a copayment or coinsurance is owed, the hospital will bill you for that but only for that, thereby you are avoiding the entire bill.

There are other important benefits to using your health insurance also.  Most of the time, your health insurance will have a beneficial contracted rate with the hospital and other providers. Just to use a rudimentary example, let’s say the hospital bill was $5,000. Let’s say your health insurance has a contracted rate to pay the hospital $500 for that visit, and your copayment is $100. In a typical case, when a personal injury attorney sends out his or her demand, we send it out for the entire amount of the damages.  In this case, I bill the responsible insurance carrier $5,000. Sometimes the carrier will ask me “does your client have health insurance?”  My standard response is “it is irrelevant if my client has health insurance are not. Your insured caused the damages and is responsible for these damages and if my client happens to have health insurance that is a benefit for my client and not your insured.”  As you know health insurance premiums can be high and typically it is my client or my client’s family that pays for these premiums and not the auto insurance carrier that is responsible for the damages. Therefore, in many states like Arizona, the benefit of health insurance is passed on to the victim of a motor vehicle accident and not the responsible auto insurance carrier.  So in the example above, I bill the responsible carrier $5,000 and typically recover $5,000 for my client.  Then, from those $5,000, I’d much rather repay and reimburse the health insurance carrier $500 that they originally paid, than to pay the hospital $5,000. If you subtract the $100 co-pay in this hypothetical I netted my client a windfall of $4,400 because they were savvy enough to use their health insurance correctly. Therefore, typically people who use their health insurance receive a much better settlement than those who don’t use their health insurance.

It is also important to note that this strategy also applies to government issued health insurance. For example, in Arizona we have state issued health insurance through Medicaid called AHCCCS (Arizona Health Care Cost Containment System).  Again, this is health insurance that a victim of a car accident had to apply and qualify in order to receive the benefit. So again, this is a benefit for the victim of a car crash and not a benefit for the person that caused the crash. Therefore utilizing government insurance works much the same way as the example above with the victim and private health insurance. As a result, typically my clients that have government ssued health insurance such as AHCCCS fair better at settlement than those who don’t.

One more thing to keep in mind that may be beneficial is that sometimes there is no need to reimburse private health insurance. Hiring a qualified personal injury attorney is important so that he or she may assist you to make this determination.  An attorney will typically have to go through a comprehensive analysis to determine whether your health insurance has a right to reimbursement.