Medical Pay Now Mandatory On Colorado Auto Insurance Policies
New Colorado Law Makes Med Pay Mandatory On All Auto Insurance Policies Issued Or Renewed After January 1, 2009
A new MedPay law, Senate Bill 11, has come into effect as of January 1, 2009. The bill helps protect drivers needing medical attention following an auto accident. The bill makes limited medical coverage mandatory for auto insurance policy holders, unless the insured opts out in writing.
After no-fault coverage was eliminated in 2003 by governor Bill Owens, there was a perceived need to provide Auto Accident victims with a medical coverage safety net. As a solution Governor Bill Ritter supported Senate Bill 11. The aim of the bill is to help insulate Colorado residents who have been injured in auto accidents from the pressure of unexpected medical expenses. The bill also facilitates faster payment to emergency care providers, many of who were being forced to wait 18-36 months, until the resolution of the Personal Injury lawsuit, before receiving compensation for services they provided.
Bachus & Schanker views Senate Bill 11 as a valuable protection for consumers. Med pay coverage only averages about five dollars a month, yet provides $5,000 in medical coverage without any deductable. That same five dollars a month to a health insurance company would not provide nearly the same benefit! Additionally, this can be used by people who lack health insurance, or to supplement to existing health insurance policy. Even if a person already has health insurance they still must pay large deductibles for ambulance and emergency room care, instead MedPay is now available to cover those costs. Furthermore, some health insurance policies explicitly state that it will not cover treatment for auto accidents, and even if it does you still may not be able to pick your doctor; thus, MedPay gives you greater freedom in choosing care providers and saves you a lot of money. Another benefit of MedPay is that the 5,000 dollar limit is for each occupant in the car, so even if an occupant does not personally have health insurance they are still covered. The fact that an occupant’s medical expenses are covered by MedPay may prevent lawsuits from the vehicle occupants against the driver’s insurance.
Auto insurance companies may try to encourage a consumer to opt out of MedPay by falsely telling them that their health insurance already covers them. The goal of insurance companies to dissuade you from participating in MedPay is not to save you money; it is to force a premature settlement of a case. Accident victims may feel pressure to settle because they are personally responsible for the expense of their treatment following an accident. Oftentimes the bills go unpaid for as long as two years, until a settlement is secured, meanwhile the victim see their medical bills piling up and receives collections threats from bill collectors. MedPay can reduce the pressure that many injured parties feel to settle prematurely just to get their medical bills paid.
In looking out for the best interest of its constitutes, the Senate has included a provision in the new act that prevents an insurance company from being reimbursed out of the final settlement, if there is one, for the $5,000 MedPay benefit. The Senate takes the same position as Bachus & Schanker, which is that when you pay for a benefit then you should receive that benefit when it is owed to you. If the large auto insurance companies were able to get reimbursed for the $5,000.00 paid out for on your behalf then the insurance company is essentially loaning you $5,000.00 and you are paying for an illusory benefit.
In conclusion, opting for Medpay is a sound financial decision. MedPay is cost effective by covering expenses health insurance may not, and at the same time does not have be paid back out of the final settlement. Also, MedPay may even prevent lawsuits from vehicle occupants to recover medical expenses because it covers each occupant. If you opt out of MedPay you are taking a real gamble, that by saving a small amount of money now, it will cost you later.
Summing Up How the Changes in MED PAY Law Affect You
The following chart provides the major changes to MedPay coverage that will affect your safety net coverage. The chart is to provide a comparison of the major effects to the law prior to January 1, 2009, and after January 1, 2009.
Prior to January 1, 2009 Senate Bill 11 Changes:
- An insurance company was not responsible for any medical bills unless there client was proven to be “at-fault” for the accident
- Persons injured in auto accidents were responsible for paying for their own medical treatment, and would only later get reimbursed by the at-fault party if there even is one.
- Persons with health insurance had to pay large deductibles for emergency care and were limited by who they could treat with and what would be covered.
- Persons without Health insurance had to petition for a lien to secure treatment, and many medical providers refused to treat on a lien.
After January 1, 2009 Senate Bill 11 Changes:
- The new law requires Insurance companies to provide consumers with the option of carrying a minimum of $5000.00 in coverage per person involved in a collision to cover medical expenses incurred as a result of an automobile injury.
- An insurance company may try to act against your best interests and encourage you to “opt-out” now to save a few dollars, even though carrying MedPay will save you a lot of money later.
- An accident victim can now avoid having to pay high health insurance deductibles for emergency care. Also, persons without health insurance can seek immediate treatment without the hassle of trying to find a health care provider who will treat an uninsured person or receiving collection notices from the hospital’s emergency room or ambulance service.
The point of this article and future uploads on this topic by Bachus & Schanker is the same goal as the Senate had in the enactment of this new law on January 1, 2009, and the same goal Bachus & Schanker undertakes with every case; to preserve the public peace, health and safety of Colorado individuals and families.