An injury after a car accident poses a number of challenges beyond physical issues and pain – as difficult and debilitating as those can be. Finding a way to pay for your treatment and dealing with related financial issues, such as lost income due to missing work, can be just as daunting, if not more so.   

There are tools that are essential to combating major medical expenses for personal injury patients: your health insurance policy, and letters of protection, or LOPs, especially for those who do not have health coverage or are underinsured.  

Using health insurance for personal injury treatment 

If you are injured in a car accident and are facing medical bills, you absolutely can and should use your health insurance plan to cover your expenses – even if you are not at fault in the incident. However, there are pitfalls to get the most out of your policy and avoid a denial of your claim.  

Pitfalls to avoid 

■ You may need to use car insurance first: Some health plans explicitly state that health coverage is ‘secondary’ to car insurance when it comes to treatment for injuries sustained in a car accident. Check your plan to see if it has this language, and, if it does, you need to use what you can in your car insurance policy. Once you have exceeded coverage limits, then move on to your health insurance coverage.  

■ Be aware of out-of-network limitations: If you choose to use health insurance, be sure to check if a medical provider you want to see is covered by the insurance company’s network. There may be restrictions on out-of-network providers.  

■ Treatment coverage limits: Likewise, some alternative treatments for your injuries may not be covered by your health plan, so be sure to check in advance if a certain type of treatment is eligible.  

■ Health insurer’s expectation of reimbursements: If you’re trying to piece together health and insurance and other sources of payment like a settlement to cover a massive medical bill, you may need to rethink that strategy: if money is coming in from another source, such as the at-fault driver’s car insurance, your health insurer will try to get some of the money it paid out back.  

■ Out-of-pocket expenses: Another thing to watch out for with health insurance is the many types of out-of-pocket expenses you will run into from the start. A quick refresher:  

► Deductible: The amount you have to pay before health coverage kicks in. The average deductible for employer-sponsored health plans in 2022 was $1,763, according to the Kaiser Family Foundation. For an estimated 28% of Americans, that would wipe out their limited savings and leave them still trying to find the remaining $763.  

► Co-pay: Your insurance might also require a co-pay for doctor visits and prescriptions. This often breaks down as the insurance company picks up 80% of the cost, leaving 20% to you. Here’s the key point: Even after you’ve reached your deductible, you will continue to have to cover the co-pay.  

► Out-of-pocket maximum: This is the point at which the health insurer picks up 100% of the costs. While you may be relieved to finally reach this point, individuals will have to pay out an average of $8,700 beforehand and families will have to cover $17,400. Remember: you will still need to continue paying your premium. Plus, if you have any out-of-network providers who are not covered, you will still be responsible for those bills as well.  

The bottom line: Your health insurance is a vital resource for you in addressing medical bills due to a car accident injury, but it’s probably best to use it as a backup, after exhausting your car insurance options, and perhaps while you’re waiting for a settlement.  

Using letters of protection (LOPs) for personal injury treatment 

For many personal injury patients, a letter of protection, or LOP (sometimes also referred to as a medical lien) can ensure they receive the care they need. For those without insurance, or who are underinsured, an LOP can be a financial lifeline.  

What it is: An LOP is essentially an agreement among the personal injury patient, a medical provider, and the attorney for the personal injury case in which payment is guaranteed to the provider from the legal settlement with an at-fault driver’s insurer.  

How it helps: An LOP means a personal injury patient does not have to wait for the resolution of their settlement to receive the medical care they need.  

Additional advantages 

■ Fair compensation: Some attorneys argue that letters of protection help personal injury patients get fair compensation in their cases.  

■ Communication between doctors and lawyers: LOPs also ensure that medical treatment aligns with the legal case. Those may seem like two entirely different processes, but treatment needs to be consistent with the arguments being made in a personal injury case. As two Texas-based attorneys note in an article on LOPs, “All too often a provider can unknowingly fail to address important issues that they do not normally focus on; for example, the cause of the injury or its impact on pre-existing conditions. As a result, plaintiffs benefit from providers who prepare medical records that clearly state the cause and extent of injury, and identify any future needs required because of those injuries suffered.” 

■ Doctors support for the legal case: Doctors treating a personal injury patient also can be witnesses in the trial. If there is an LOP in place, there is no need to pay them as medical experts, as the above attorneys note.  

■ Full payment for medical providers: Payments made through LOPs are usually at a higher rate than those used for direct insurance payments or available through Medicare. This ensures a medical provider is fully compensated for their services, making LOP a valuable tool for maintaining a practice’s financial stability, especially given the potentially long wait of a court case.  

Potential pitfalls 

■ Attorney payments: In some agreements, attorneys ensure they get paid before anyone else does. To ensure an agreement is a legitimate LOP in which your doctor will be paid, look for this language: “We agree to pay reasonable and customary charges for medical services.” If you see an LOP that does have problematic language in it, there’s a simple remedy. As one Kiplinger’s advisor notes, just “cross out the offending language on the document, initial it, have your patient initial it, and insist upon the lawyer also initialing it and returning it to you before scheduling medical procedures.” 

■ A settlement is not guaranteed: An LOP gambles on the likelihood of a personal injury case settling in the patient’s favor. If this doesn’t happen, the patient could, in theory, be on the hook for all those large medical bills. Even if the patient wins the case, the settlement amount may be too small to cover the amounts promised to the doctor in the LOP. Sometimes an attorney can negotiate with the medical provider over this. Alternatively, doctors can sell their LOPs to a third-party servicer like Gain, which assumes the liability and risk associated with these cases.  

If you’re navigating the complexities of medical expenses after a car accident, understanding your options is crucial. Whether it’s leveraging your health insurance or utilizing Letters of Protection (LOPs), having the right tools can make all the difference in your recovery journey.  

At Gain, we specialize in providing financial solutions and support for personal injury patients, ensuring you receive the care you need without the added stress of financial burdens. Don’t let medical bills overwhelm you—reach out to us today to explore how we can assist you in managing your medical expenses and securing the treatment you deserve. Contact us now to learn more about how we can help you on your path to recovery.