If you are injured in a car, truck, or motorcycle accident and your medical bills are paid by your health insurance, automobile Medical Payments Coverage (Med Pay), Medicare, a Medicare Advantage Plan (MAP), or Medicaid, you will most likely be required to pay them back if you later receive a settlement or monetary recovery. This is because these plans typically have a right of subrogation—a legal right to be reimbursed for the expenses they covered on your behalf. How much they are entitled to recover can vary based on the type of plan and applicable laws.

Employer-provided health insurance plans that are ERISA self-funded typically have strong subrogation rights and may demand full reimbursement of the benefits paid out. Private health insurance plans, some employer-sponsored plans, and Med Pay benefits may allow reductions for attorney’s fees and litigation costs, often referred to as procurement costs. Medicare and MAPs hold federal statutory liens on your recovery and must be reimbursed, but they also allow for deductions of legal fees—usually up to 33.33% plus a share of litigation expenses. Medicaid plans, such as Indiana’s Healthy Indiana Plan, generally must be reimbursed too, but in practice they may not always follow the legal procedures required to enforce reimbursement rights. Failing to address these liens properly can leave you, your attorney, and even your auto insurance provider personally liable for repayment, so it’s critical to work with an attorney experienced in handling subrogation and lien issues.

When it comes to paying your medical bills after an accident, the best strategy is to submit them first to your health insurance, Medicare, MAP, or Medicaid. This allows you to take advantage of previously negotiated discounts and write-downs with your medical providers. You should avoid giving the hospital or emergency room your auto insurance information up front, as hospitals often prefer to bill Med Pay first to receive full payment without any discount. Doing so quickly exhausts your Med Pay benefits, which are typically limited (often $5,000), and may leave you with additional out-of-pocket expenses.

Instead, once your health insurance reduces the bill (for example, a $10,000 ER bill might be reduced to $2,500–$3,000), you can submit the remaining personal balance to Med Pay. This approach preserves more of your Med Pay benefits for future use. However, some health plans may require you to exhaust Med Pay before covering any expenses—your insurer will inform you if this applies.

Keep in mind that the at-fault driver’s insurance will not pay your medical bills while your claim is pending, which could take months or even years. During that time, most medical providers will offer payment plans, and chiropractors may request you sign a Letter of Protection—a document that delays your payment obligations until your case settles or you receive a jury verdict.

Understanding how to coordinate insurance benefits, manage liens, and protect your financial interests after an accident is complex. The guidance of a knowledgeable personal injury attorney can help you avoid costly mistakes and ensure you don’t pay back more than legally required.