Could I, should I, would I use my health insurance to cover treatment for injuries sustained in an automobile accident? Maybe. Maybe not. If you’ve been in an automobile accident and have suffered injuries, the treatments for those injuries are commonly paid for by your automobile insurance. The coverage is called Personal Injury Protection (PIP). However, your health insurance may pay for this. There is a provision whereby you can elect to have your health insurance be primary and pay first, and your auto insurance would provide secondary coverage. But is this a wise decision? Let’s take a closer look.
When choosing options on auto insurance policies, people will select their health insurance as primary coverage and their automobile insurance as secondary coverage to decrease their automobile insurance premiums. But do the cost savings outweigh the risks? It may save you a little money on the front end but actually cost you more money if you’re involved in an auto accident.
We see auto insurance policies where the policy holder has elected to use their health insurance as their primary coverage and invariably, it turns out to be a negative decision. These negatives far outweigh any nominal cost savings.
Reasons to NOT choose your health insurance as primary.
- You may not be covered. Does your health insurance cover injuries from an auto accident? You must study your health insurance policy. Some policies don’t cover treatment for injuries that arise from automobile accidents.
- Your out-of-pocket maximum costs may be higher with your health insurance. Your health insurance has a deductible, co-pays, and in some cases a co-insurance payment. These may be higher than your auto insurance resulting in higher out-of-pocket expenses for you.
- Medicare and Medicaid. If you have either of these health insurance policies, you are not allowed to choose the health insurance primary option. Occasionally, an uninformed (or unscrupulous) agent may sell you this policy. Then, when you use this policy to pay for medical services for an automobile accident, you’ll end up having to pay the government back. Don’t do it.
- You could be paying for PIP benefits that you’ll never use. Secondary coverages (in this case, your auto insurance) kick in only after the primary coverage exhausts. Health insurance policies aren’t allowed to place caps on benefits so you many never exhaust your benefits. That $250,000 in PIP benefits will never be used but you’ll still be paying for it.
- You may not be able to go to the doctor of your choice. If you choose your health insurance as primary and it’s a network plan, you’ll be limited to only those doctors in your network. The health insurance may restrict you to only certain doctors and place limits on how often you can see them. PIP does not have network restrictions, and you are welcome to go to the doctor of your choice.
- Lack of experience. Your health insurance may not be well-versed in auto accident treatment whereas your auto insurance company handles these situations every day. It may take months to get a simple imaging procedure approved through your health insurance company but only days with your auto insurance. Specialist visits, diagnostic testing, and treatment may be postponed for long periods of time, or altogether denied through health insurance whereas auto insurance companies use third-party precertification companies that address the approval process in only days.
- Having to pay back your health insurance. It sounds crazy but you may have to pay back your health insurance for the treatment they paid for. The scenario looks like this: You’re involved in an auto accident and suffer injuries. You get treatment for those injuries. You’ve chosen your health insurance as primary, and they pay for medical services. The accident was not your fault. You hire an attorney, and a settlement is won on your behalf. Your health insurance now asserts a lien forcing you to pay back any money spent on your medical bills. Through this lien, a health insurer can demand that you pay back, out of your settlement, any money they spent on your medical bills. On the other hand, auto insurance (PIP) cannot assert a lien nor demand pay back of money from your settlement.
I understand the need to cut costs but choosing your health insurance as primary in order to decrease auto insurance premiums is NOT a good idea. If you get talked into this choice, you may end up:
- Spending more on out-of-pocket expenses.
- Paying for PIP benefits you’ll never use.
- Having limited access to medical care.
- Dealing with inexperienced health insurance reps who know far less than auto insurance adjusters.
- Having to pay back your health insurance company.
If you have any questions regarding this, please do not hesitate to contact us. We’ll be happy to help you.
