What’s the difference between PIP and Med Pay coverage on your automobile insurance policy?
Attorneys, BlogPosted in on April 4, 2017
In the Commonwealth of Massachusetts, Personal Injury Protection (PIP) coverage is mandatory. PIP pays reasonable expenses for necessary medical services, lost wages, and replacement services to you, your household members, and your vehicle occupants if injured or killed in an auto accident regardless of fault.
PIP pays the first $2,000.00 in automobile accident related medical bills and will usually cover up to a total of $8,000.00 if the injured party either does not have private health insurance coverage, has a private ERISA-covered health insurance plan, has MassHeath or Medicare, or has had his or her claim denied for non-covered services by the health insurance company. Once the initial $2,000.00 in coverage is exhausted, any remaining outstanding and future medical bills are deferred to your private health insurance company. The remaining $6,000.00 in PIP coverage is reserved for lost wage reimbursement (75% of gross earnings) and/or any medical expenses not covered by your private health insurance carrier, such as cosmetic and dental services, co-payments and deductibles.
It is important to understand the difference between PIP and Medical Payments (Med Pay) coverage when you are selecting your auto insurance coverage and optional coverage packages. Since Med Pay coverage is optional, it is in excess of your PIP coverage and cannot be carried without PIP coverage. The limit of liability you purchase for the Med Pay policy applies to each person who sustains bodily injury in one accident. Your Med Pay coverage moves with you, whether walking, riding in another vehicle, or on public transportation, or in or out of the Commonweath of Massachusetts, as well as with your insured vehicles, regardless of who’s driving and it carries no deductible or co-pay.
The benefit of Med Pay is that is covers myriad of other out-of-pocket costs that your typical health insurance policy will not cover, including chiropractic, dental, prosthetics and, in a worst-case scenario, funeral expenses. Additionally, after you have exhausted your PIP coverage you can tap into the Med Pay policy without ever needing to use your private health insurance.
In Metropolitan Property and Casualty Ins. Co. v. Blue Cross and Blue Shield of Massachusetts, Inc., 451 Mass. 389 (2008), the Massachusetts Supreme Judicial Court held that when the health insurance policy specifically defers payment to Med Pay coverage, then, after the initial $2,000.00 in PIP is exhausted, instead of your medical bills being submitted to your health insurance provider, your bills will be submitted for payment under your Med Pay policy.
Since your health insurance provider is entitled to reimbursement for all benefits paid on your behalf resulting from the accident and will attach a lien to your personal injury case for the repayment of same, having a Med Pay policy can avoid such a lien up to the amount of coverage you have purchased.
When searching for ways to lower your car insurance premium, you may be tempted to drop the Med Pay coverage from your policy because it is not a mandatory policy requirement. Keep in mind that a basic premium for a Med Pay policy is minimal. A $5,000.00 policy is likely going to cost between $20.00 and $25.00 per year. Med Pay coverage can be purchased in increments of as little as $5,000.00 or upwards of $25,000.00 or higher, the benefits of which far outweigh the premium.
If you have been in an accident and you are unsure of your coverage selection and benefits, contact Baker, Braverman & Barbadoro, PC and we will review your benefits and assist you in filing a claim to ensure you receive immediate use of your PIP and other benefits under your insurance policy. – Christine T. LaRose.