Another very recent change in Colorado law that I would like to talk about is Medical Payment (Med Pay) coverage becoming non-subrogable.  Sounds boring, right?  Hang in there with me and read this, because it is a very positive change that benefits you in the event of an auto collision, commercial truck collision, or other injury.

Previously, I posted discussions about liability coverage and UM/UIM coverage, both of which you purchase from your own insurance carrier.  Med Pay is another type of coverage offered by your insurance carrier.  Med Pay coverage is simply an amount of money (typically $5,000) that your insurance company agrees to pay to medical providers in the event that you are involved in a motor vehicle accident.  This gives some relief to you because it covers the costs of care such as emergency room visits, ambulance service, expensive testing and follow-up care.  Instead of the dollars coming out of your pocket, Med Pay acts as a first layer of defense by paying those costs. 

Until this year, Med Pay coverage was subrogable by your insurance carrier.  “Subrogable” simply means recoverable.  So, in other words, if your insurance company paid Med Pay benefits to a hospital or doctor, the company retained the right to force you to pay them back whatever amounts they paid on your behalf. 

Let’s do the example thing:  a busy fellow on his IPhone runs over you in his Lexus while you are riding your motorcycle, and you are taken from the scene by ambulance to an emergency room.  The emergency room doctors perform a CT scan to make sure you don’t have head trauma, and several x-rays to rule out broken bones.  Luckily, it turns out that you are relatively uninjured, with only some scrapes and bruises.  But, the ambulance, ER and testing bills are $5,000.  If you have $5,000 in Med Pay benefits, pays those bills for you.  That is a good thing. 

Now the plot thickens: you hire a lawyer to recover from the busy fellow.  Your lawyer recovers $25,000 for you after filing suit.  Until last year, any Med Pay money paid out on your behalf was subrogable/recoverable by your insurance company.  So, in the example above, you would have had to repay your insurance company all of the $4,500, even though you had to hire a lawyer to win damages on your behalf.  Sounds odd, right?  Why would you have to repay for the insurance money that you were paying premiums for? 

The Colorado legislature agreed that it was odd.  Beginning in 2010, Med Pay benefits are no longer subrogable, or recoverable in the example I gave above.  You are not responsible for repaying your insurance company for the Med Pay money if you retain an attorney to recover damages on your behalf.   The reasoning behind this is that the law recognizes that you are paying the insurance premium to pay for your medical treatment.  You aren’t paying for the right to get a loan in the event that you are injured. 

Med Pay subrogation is one of the tricks that insurance companies play on consumers.  The insurance companies are happy to have consumers believe that they *owe* the money paid out on the consumers’ behalf if there is a lawsuit which recovers money damages for the consumer.   They want you to think that you are lucky to have them, and that you get the privilege of paying to keep them, no questions asked.

The bottom line to you is simple.  If you are injured and have Med Pay, use it to pay your medical expenses.  If you then hire a lawyer, that money already paid will not be deducted from any verdict or settlement that you obtain through your claim. 

Most insurance policies offer a standard amount of $5,000 in Med Pay coverage.  As with UM/UIM insurance, I recommend that you increase from the basic amount of coverage to at least $25,000.  The reason is that even basic medical care in America can quickly surpass $5,000.  Ambulance bills are routinely $1,000 or more, even if you are only driven a few miles.  ER bills are high, and the doctors that treat you bill separately from the hospital itself.  X-rays, CT scans, MRIs and other tests are billed separately also.  A CT scan is usually no less than $1,500, as is a MRI.   Heaven forbid you have some serious injury such as head trauma

Since Med Pay is no longer recoverable, it is prudent to have a larger amount of money at your disposal.  It is not particularly expensive on a six month policy; usually $75 or so. 

Alright, I think that makes sense.  I would appreciate some feedback on whether it does or not.  Is anyone still awake?  Call me if you’d like at (303) 694-2666 for more information.