Options for Covering your Medical Costs after an Accident

Ways to pay for medical bills you may not have thought of - plus one big myth you don’t want to learn the hard way

When you have been injured in an accident, there are many issues that must be addressed: You must compensate for not being able to work, you must make transportation arrangements, and you must figure out how to cover your medical expenses.

Medical costs will be your largest obstacle after the accident.

Covering medical costs after an accident can be difficult. However, if you work with your attorney during this time you will find that there are options available for you that ensure you receive the proper medical care without causing a financial disaster.

Even if you don't have an attorney, there are options for covering medical bills after an injury, though you will be better off working with a lawyer if at all possible.

Auto policy coverage, in the case of car accidents

Depending on the laws of your state and the type of insurance policy covering the event, your car insurance will likely cover between $10 and 25,000 of your medical expenses.

If your state is a No-Fault state, these payments will come from your policy. (See esurance.com's description of no-fault car insurance and why it's controversial.)

If it is an At-Fault state, the payments will come from the insurance policy of the person that is at fault for the accident.
FreeAdvice.com breaks down the gist of fault vs. no-fault here (along with a lot of great detailed information on specific states):

Fault states: Most states have adopted a fault-based, or tort liability, system of auto insurance. In a fault-based system, insurance companies pay according to each party's degree of fault. If you and your insurer don't see eye-to-eye on your claim, you may have to file suit for uncompensated economic damages such as lost wages and medical expenses and non-economic damages like pain and suffering.

No-Fault States: Because the tort (lawsuit) system has led to many long and costly court battles over who was at fault and to what degree, policymakers in most states changed from a fault-based system to some form of a no-fault system.

Under no-fault automobile insurance laws, the good driver does not have to prove that the crash was somebody else's fault before getting compensation. His insurance company picks up medical bills, rehabilitation costs and lost wages up to the amount spent. The tradeoff is the injured person cannot sue the other driver for pain and suffering, emotional distress and inconvenience. (If you live in a no-fault state, the no-fault portion of your auto insurance policy is usually called PIP or personal injury protection.)

Personal health insurance may kick in to help covering medical costs after an accident

After the amount available under car insurance has been maxed out, some states will allow your personal health insurance to cover some of the expenses.

This again will depend on the policy and state law.

The new rules under the Affordable Care Act have made it possible for health care providers to charge insurance companies under certain circumstances.

The remaining bills, however, as well as ongoing expenses are the responsibility of the injured party.

This is where it can become very difficult for the injured party. Many of the injuries that are sustained prevent the injured party from working. You are already facing financial strains, and now you have the potential to be denied medical care without the proper payment.

What else can be done to cover medical expenses?

Contingency-based medical billing

One of the most important services that your personal injury attorney may provide is access to medical care providers that will bill on a contingency basis.

What this means is that the attorney arranges with the doctor for your medical care costs to be delayed until a settlement is reached with the insurer over the accident. Once that settlement is reached, the law firm reimburses the medical care providers for their services out of the settlement check.

Your attorney will make sure that your medical costs are all included as part of any settlement offer so that you do not suffer additional financial harm by having to pay for medical costs out of settlement monies designated for your losses and future care.

The big myth – who is responsible for covering medical costs after an accident or injury?

Many people believe that the responsible party is sent the medical bills throughout the compensation process and that they willingly pay these bills.

It is simply not a fact that the responsible party for the accident must cover your medical costs after the accident.

The truth is, you can sue for compensation for these medical costs, which is part of what every accident attorney includes in their request for compensation - but the other party is not obligated to pay these bills along the way. Once a settlement is reached with their insurer, the bills will be covered in the settlement.

Until then, these bills simply add up for the injured party.

What if the specialist you need does not accept contingency payments?

If your attorney cannot make arrangements with a doctor or medical facility on your behalf, you will be required to pay for your medical care.

Obtaining a personal loan or looking into lawsuit funding may be an option for you. However, you will need to look at these options very closely so you understand just how these financial products work and how much they will cost to repay.

Litigation funding

Litigation funding is a type of loan that provides a loan against the compensation you will receive when your accident or injury case is finalized.

These types of loans can be processed very quickly and do not require credit checks or any type of credit ratings. However, these loans can be costly to repay if you are not careful.

It is essential that anyone using one of these services check with different services and select the one with the best repayment rates.

What happens if you do not pay your medical bills?

The first thing that you should consider is that if you do not pay your medical costs, the care provider may refuse additional treatments. This could have a long term effect on your health and the quality of your life.

The second thing that you will need to consider is that medical facilities turn their debts over to collection agencies very quickly and the harassing phone calls will begin.

You will also have to worry about how these unpaid bills will impact your credit rating. Impacting your credit score could cause additional problems for you in the future.

Your attorney may be able to help delay billing

If you have bills coming in that you cannot pay, speak to your attorney.

Many times your attorney can contact the medical center and make arrangements on your behalf so that paying the bills can be delayed until your settlement is finalized.

This will help prevent the bills from going into collection and ruining your credit standing.

If you've run out of options for paying medical bills

Let's say you have neither insurance nor the help of an attorney.

Bankruptcy from medical bills after an accident

Many people consider bankruptcy, as it can wipe out the debt obligation to the medical provider.

However, bankruptcy carries with it so many potential complications for your future that you would do well to consider talking to the hospital or health care provider first.

Nolo discuses bankruptcy and other options if you can't pay your medical bills

Talk to the hospital or health care provider about medical costs after an accident

Sometimes the hospital or provider will be open to negotiating a smaller bill, a discount on overall charges amount (for a down payment or simply outright), or a gradual payment plan, even if it's a small amount per month. Speak to the billing office at the medical institution.

Check other places to determine whether you're eligible for financial assistance

• Medicaid
• State children's health insurance plan
• Local assistance programs.
• Financial aid from hospitals or medical clinics

Other parties who can help or provide advice on covering medical bills after an accident

• Non-profit credit counselor
• Medical billing advocate
• Hospital ombudsperson
• Support groups that exist to help others in a similar situation to yours

When you are facing all of the medical costs associated with your accident it's easy to feel overwhelmed.

Understanding how these bills are paid and where you can access medical care without causing a financial crisis to yourself and your family will alleviate some of this stress.

More on covering medical bills after an accident or injury

• See AllLaw's info on covering medical bills if your injury was from boating, slip and fall, car crash or work related accident.
• NetQuote discusses auto policy coverage in various cases (at fault, no fault, etc.)
• Financial resources at needhelppayingbills.com
• What to do about student loan payments if you become disabled after an accident