The Intersection Between MedPay Coverage and Health Insurance Subrogation in Car Wreck Cases

Medical Payments Coverage (or “MedPay”) is optional insurance coverage available to Georgia drivers. MedPay coverage can be used to pay medical bills or funeral expenses an “insured” person incurs due to a motor vehicle collision. In Georgia, a policyholder can select from a range of MedPay coverage options: $1,000, $2,000, $5,000, $10,000, $25,000, and $50,000. The more the MedPay coverage, the more accident-related medical expenses the policy will cover.

Georgia law generally defines “insured” to mean the policyholder; his/her “resident spouse”; any “resident relative” occupying the covered vehicle; and any other person “legally occupying” the covered vehicle. See O.C.G.A. § 33-34-2(1).

MedPay coverage is “no fault.” That means that, as long as you meet the definition of an “insured” and your injuries occur in a covered vehicle, MedPay will pay your accident-related medical bills up to the coverage limit regardless of fault. For example, if your automobile insurance policy includes $5,000 in MedPay coverage, and you are injured while driving your own vehicle in a single-car crash, then because you are an “insured” under the MedPay policy operating a covered vehicle, your auto insurer will pay your medical bills up to $5,000 even if you caused the crash.

Another example involves a recent client of our firm. Our client was a passenger in a vehicle owned by a friend, who was driving the vehicle. That friend was insured under an automobile liability policy that included $25,000 in MedPay coverage. Although the friend caused the crash that resulted in serious injuries to our client, MedPay covered our client’s medical bills up to the $25,000 policy limit. MedPay covered our client’s medical bills because she was “legally occupying” her friend’s covered vehicle.

Notably, MedPay can be used to repay health insurers and thereby reduce injury victims’ reimbursement obligations. The obligation to reimburse health insurers arises from a concept called “subrogation.” Most health insurance policies include a “subrogation” provision that says something like this: “If we (the health insurer) pay medical bills that you (the policyholder) incur because of a third-party’s negligence, and you sue that third-party and recover any money, then you must reimburse us for the medical bills that we paid.” Thus, if you incur medical bills because of a car crash that another driver causes, and your health insurer covers those medical bills, you can pretty safely bet that you will receive a demand for “subrogation” from your health insurer.

In certain circumstances, MedPay coverage can be used to reduce or even eliminate such a subrogation claim. In our prior example, our client’s health insurer paid more than $40,000 in accident-related medical bills. Because her friend (the at-fault driver) carried $25,000 in MedPay coverage, we were able to use that money to pay down the health insurer’s subrogation claim, reducing it by more than half.

The benefits of MedPay coverage (for you and your passengers) far outweigh its costs. Typically, the cost to move from $2,000 to $10,000 in MedPay coverage is only around $10 per year. (Kacie Goff, Medical payments coverage, Bankrate (July 20, 2021, 11:56 AM EDT), https://www.bankrate.com/insurance/car/medpay-in-car-insurance/.) If you are unsure whether your automobile insurance policy provides MedPay coverage, reach out to your agent or insurer to inquire. After all, it is a small price to pay for an extra layer of coverage protection.