When injured in an accident many people do not want to use their health insurance to cover the costs of their injuries. Why? Because everyone fears the health insurance lien.
A health insurance provider can place a lien against your recovery from a third party action for all medical expenses they paid as a result of another person's negligence. To most, this concept is overwhelming, even scary. But the truth is, using your health insurance, even with the possibility of a lien, really does benefit a client when it comes to settling their case or receiving a verdict in their favor.
The truth is, attorneys have a good chance of negotiating a reduction of a health insurance lien. It is more difficult to negotiate a reduction with a doctor for his full bill that has been unpaid for the length of your case. Since it could take up to 2 years to litigate a case to conclusion, doctor's are more inclined to collect what is due.
There are laws that describe the formula for reductions to be given by Federal or State funded insurance plans such as Medicare and Medicaid. While private carriers are not obligated to reduce their liens, attorneys have had great success in obtaining reductions, even in the private sector.
You must understand that even if you don't use your Federal or State insurance (Medicare, Medicaid, medical assistance programs), your attorney is still obligated to put them on notice of a third party liability action. There are a series of steps that must be taken just to receive a letter stating that these programs do not have a lien in this case. This series of steps could take a year to complete and your settlement money cannot be released until the final step is complete and the final decision is made by these type of providers.
Another benefit to using your health insurance is that health insurance providers are generally forced to accept what the health insurance company pays and cannot "balance bill" the client. In Maryland and Virginia, if you use your health insurance and you use an in-network provider, the physician or health care facility cannot bill you the balance that was not covered by the health insurance. What this means for the client is that the costs of their health care are controlled. The lien invoked by the health insurance provider will still be less than the total of your medical expenses if you opt to self-pay the bills from the settlement proceeds.
Overall, you will have a better result if you use your health insurance to cover the costs of your medical expenses in a personal injury case.
