Medical Payments Coverage vs. Health Insurance: The Double Recovery Most People Miss

Most Colorado drivers who carry medical payments coverage on their auto policy have no idea how powerful it actually is. They see the line item on their declarations page, note that it costs a few dollars a month, and never think about it again until they are sitting in an emergency room after a crash trying to figure out how their bills are going to get paid.

Here is what your insurance agent probably never told you. MedPay and health insurance are not the same thing, they do not work the same way, and in many situations you can collect from both. Understanding how these two coverages interact can mean thousands of dollars in your pocket after an accident rather than thousands of dollars in unpaid medical debt.

What Medical Payments Coverage Actually Is

Medical payments coverage, commonly called MedPay, is an optional addition to your Colorado auto insurance policy. It pays for medical expenses resulting from a car accident regardless of who was at fault. If you were the driver, a passenger, or even a pedestrian hit by a car, MedPay covers your medical bills up to the policy limit.

The key word in that paragraph is regardless. MedPay does not care who caused the accident. It does not require you to prove fault, file a claim against another driver, or wait for a liability determination. You submit your medical bills, and MedPay pays them. That simplicity is its greatest strength.

Colorado allows MedPay limits typically ranging from $5,000 to $100,000 or more. Many drivers carry the minimum or decline it entirely because they assume their health insurance will handle everything. That assumption costs people real money every single year.

How MedPay Differs From Health Insurance

Health insurance and MedPay both pay medical bills, but the similarities end there.

Health insurance comes with deductibles. If you have a $3,000 deductible, you are paying the first $3,000 out of your own pocket before your health plan covers anything. After the deductible, you are still responsible for copays and coinsurance, often 20% to 30% of every bill, until you hit your out-of-pocket maximum. For a serious car accident with $50,000 in medical bills, your personal share under a typical health plan could reach $8,000 to $12,000 or more.

MedPay has no deductible. No copays. No coinsurance. No network restrictions. No preauthorization requirements. You receive medical treatment, you submit the bill, and MedPay pays it dollar for dollar up to your coverage limit. You can see any provider you choose, at any facility, without worrying about whether they are in network.

MedPay also covers expenses that many health insurance plans exclude or limit. Ambulance transportation, dental work necessitated by the accident, prosthetic devices, and even funeral expenses in fatal accidents are typically covered under MedPay.

The Double Recovery That Changes Everything

Here is where it gets interesting for the financially aware driver. In Colorado, MedPay is generally considered a first-party benefit that you paid for with your premiums. When you also have health insurance, both coverages can apply to the same medical bills.

How this works in practice depends on policy language and coordination of benefits provisions, but the result can be genuinely significant. If MedPay covers your medical bills directly, your health insurance deductible may remain untouched. If health insurance pays first, MedPay can reimburse your out-of-pocket costs including deductibles, copays, and coinsurance.

Either way, you are recovering expenses that would otherwise come directly out of your bank account. On a $40,000 emergency room visit followed by weeks of physical therapy, the difference between having MedPay and not having it can easily exceed $10,000 in personal savings.

And here is the part that surprises most people. If you are also pursuing a personal injury claim against the at-fault driver, the interplay between MedPay, health insurance, and your injury settlement creates additional financial dynamics that an experienced attorney can navigate to maximize your total recovery.

The Subrogation Question

Subrogation is the process by which an insurance company that paid your bills seeks reimbursement from the at-fault driver’s settlement. Health insurance companies frequently assert subrogation rights, meaning they want to be repaid from your injury settlement for the medical bills they covered.

MedPay subrogation works differently in Colorado. Whether your auto insurer can subrogate against your personal injury settlement depends on your specific policy language. Some MedPay policies include subrogation clauses. Others do not. The distinction matters enormously because a MedPay policy without subrogation rights means that coverage is effectively free money. You collect it, you use it, and your insurer cannot claw it back from your settlement.

Even when subrogation rights exist, Colorado law imposes limitations on how subrogation is exercised. An attorney familiar with Colorado insurance law can often negotiate subrogation liens down significantly, putting more money in your pocket.

What Most People Get Wrong

The most common mistake is declining MedPay because you already have health insurance. The two coverages serve different purposes and the cost of MedPay is remarkably low relative to its value. Adding $10,000 in MedPay to your auto policy might cost $20 to $40 per year. That is less than a single emergency room copay.

The second most common mistake is not using MedPay when you have it. After an accident, many people default to running everything through their health insurance because that is what they are accustomed to doing. They pay their deductible, absorb their copays, and never file a MedPay claim at all. Their auto insurer is not going to remind them. Those premiums simply become profit the insurance company keeps.

The third mistake is assuming MedPay only covers the policyholder. In most Colorado auto policies, MedPay extends to passengers in your vehicle and may cover household members injured as pedestrians or cyclists. If your spouse or child is hurt in an accident, your MedPay coverage may apply even if they were not driving your car.

Practical Steps to Protect Yourself

Check your current auto policy right now. Look for the medical payments coverage line. If it says “rejected” or shows no coverage, call your agent and add it. Ask for at least $10,000 in coverage, more if you can afford it. The premium increase will likely be negligible.

If you already carry MedPay, verify the limit. Many drivers carry only $5,000 because it was the default option when they purchased their policy. For a serious car accident, $5,000 covers roughly one ambulance ride and a few hours in the emergency room. It is better than nothing, but it is not enough for any injury that requires follow-up care.

Keep your MedPay declarations page somewhere accessible. After an accident, you will be dealing with pain, confusion, and a flood of paperwork. Knowing exactly what coverage you have and where to find it saves time and prevents the kind of mistakes that cost money.

If you have been injured in a Colorado car accident and are unsure how your medical bills will be paid, you may have more coverage than you realize. Call Flanagan Law at 720-928-9178 for a free consultation. We will review your MedPay, health insurance, and all available coverage to make sure nothing goes to waste.

Frequently Asked Questions

Can I use MedPay even if the accident was my fault?

Yes. MedPay is no-fault coverage, meaning it pays regardless of who caused the accident. This is one of its most valuable features. Whether you rear-ended another driver, were hit by a drunk driver, or lost control on black ice, your MedPay coverage applies.

Does filing a MedPay claim affect my insurance rates?

Generally no. MedPay claims are first-party claims on your own policy for coverage you specifically purchased. Colorado law discourages insurers from penalizing policyholders for using coverage they paid for. However, the accident itself may affect your rates depending on fault, so review your policy terms or ask your agent.

What if my MedPay limit is not enough to cover all my medical bills?

MedPay pays up to its limit and then stops. Any remaining bills would be covered by your health insurance, the at-fault driver’s liability coverage, or your own underinsured motorist coverage depending on the circumstances. This is why carrying higher MedPay limits is so valuable. The gap between your MedPay limit and your total bills often becomes your personal financial exposure.

Can I collect MedPay if I was a passenger in someone else’s car?

In most cases yes. If the vehicle you were riding in carried MedPay, that coverage typically extends to passengers. You may also be able to file a claim under your own auto policy’s MedPay coverage even though you were not in your own vehicle. Both policies may apply, giving you access to two separate MedPay limits.