Does Health Insurance Cover Medical Bills in Colorado?

Yes, health insurance typically covers medical bills after an accident in Colorado — but you may need to repay your insurer from your settlement. The at-fault driver’s insurance is ultimately responsible, but they won’t pay until your case settles, which can take months or years. In the meantime, your health insurance, medical payments coverage, or medical liens help cover immediate treatment costs.

Following a Colorado personal injury, people may have questions whether their medical bills should be paid by their health insurance. This is an important topic in personal injury law. In what follows, we will explore the nuances of Colorado personal injury claims and delve into the role of health insurance, while discussing the impact of medical bills on case value.

How Health Insurance Covers Accident-Related Medical Bills in Colorado

Auto accident-related medical bills in Colorado often involve a complex interplay between health insurance, auto insurance, and potential liens. 

In Colorado, at-fault drivers and their auto insurance are responsible for paying damages to victims. This includes medical bills. However, the at-fault party’s auto insurance will not pay a victim’s medical bills until the personal injury claim is settled, which could take months or years. Of course, a victim may need extensive and ongoing medical treatment well before a settlement is reached. It is also likely medical bills will have to be paid periodically before the at-fault auto insurance ultimately pays a claim. 

Health insurance plays a pivotal role in covering immediate medical expenses, ensuring individuals receive necessary medical care without facing financial ruin. However, it is essential to understand health insurance and personal injury claims serve different purposes. 

Do I Have to Pay My Medical Bills from My PI Settlement?

The responsibility for paying medical bills from a personal injury settlement hinges on two major concepts:

• Subrogation
• Medical liens. 

It is important to understand these topics when evaluating a potential settlement. 

What Is Subrogation and How Does It Affect Your Settlement?

Subrogation involves health insurance companies seeking reimbursement from personal injury settlements. Health insurance providers have a right to reimbursement for benefits paid out in connection with a personal injury claim. Generally, health insurance companies are legally entitled to all funds they paid out for a person’s medical care and will ask for reimbursement from the settlement proceeds. This can impact the distribution of settlement funds and requires careful analysis before committing to any settlement.

In short, subrogation means your health insurer may be reimbursed from your personal injury settlement for medical expenses they already paid. However, working with a Colorado personal injury lawyer can often help negotiate this amount down.

What Are Medical Liens in Colorado Personal Injury Cases?

A medical lien is a legal claim against personal injury settlements or judgments to recover medical expenses. This concept is crucial in navigating personal injury cases and often requires guidance from an experienced personal injury attorney.

Healthcare providers may treat victims of personal injury with no upfront costs, but will then assert a lien on their future settlement. Medical liens usually occur when an injury victim needs medical treatment but has either inadequate or no health insurance. Once settled, any medical providers with a lien will need to be paid from your settlement proceeds. 

While medical liens can be helpful in assuring a victim gets the medical care they need, there are potential issues. For instance, if your settlement turns out to be less than your medical liens, the lien holder can take your entire settlement, leaving you with nothing in your pocket. Thankfully, in Colorado, a law in effect since September 2021 prohibits a lien holder from going after you for additional money if your settlement is not enough to cover the original lien amount.

A medical lien lets providers recover costs directly from your settlement, often when treatment was provided before payment. Colorado law protects you from personal liability beyond your settlement amount.

Can You Negotiate or Reduce What You Owe After a Settlement?

The amount owed to health insurance and medical providers may be reduced, which can mean more money in your pocket come settlement. Generally, these amounts can be negotiated, so a personal injury lawyer can be very helpful in securing lower-owed amounts and getting you a more favorable settlement.

Bottom line: Most subrogation claims and medical liens can be negotiated down by an experienced attorney, often by 30-50% or more, leaving you with more compensation. 

What Damages Can You Recover Beyond Medical Bills?

A personal injury claim is a legal remedy sought by individuals who have suffered injuries due to the negligence of another party. It encompasses proving liability, demonstrating damages (both economic and non-economic), and seeking compensation for those damages. In these cases, a personal injury attorney plays a pivotal role in assessing the case’s value and navigating the legal complexities and process that are involved in seeking recovery.

While health insurance helps pay for past and ongoing medical treatment, personal injury claims seek compensation for various damages, including, but not limited to: 

• Future Medical Treatment;
• Lost Wages;
• Pain and Suffering: including
  • Physical pain;
  • Mental anguish;
  • Scarring;
  • Permanent disfigurement;

As you can see, a personal injury settlement can include significantly more than just actual medical bills, depending on the specific facts of your case.

Will I Lose Health Insurance Benefits if I Receive a Personal Injury Settlement?

Receiving compensation can affect various income-based benefits, such as Medicaid. Even a small increase in your income could affect your eligibility for Medicaid. 

Medicaid is designed to benefit individuals who cannot afford private insurance plans. In Colorado, Medicaid is also known as “Health First Colorado.” Eligibility is determined by evaluating an individual’s income and “countable assets.” An individual must have an annual income at or under 138% of the Federal Poverty Guidelines, or about $20,120 per year, to be eligible for Medicaid in Colorado. In addition, an individual must have $2,000 or less in countable assets, which include things like investments, bank accounts, and real estate, to be eligible for Colorado Medicaid.

Obtaining a personal injury settlement may cause you to become ineligible for Medicaid. Without taking further protections, personal injury settlement proceeds could bring your countable assets above $2,000. Fortunately, there are ways to protect your Medicaid benefits even when receiving a personal injury settlement. For this reason, it is important to consult an experienced personal injury attorney to see how you can protect your benefits in the wake of a settlement. Consulting a personal injury lawyer can help you learn how you can allocate your settlement funds while maintaining your Medicaid benefits.

Important: A settlement can affect Medicaid eligibility if it pushes you over the $2,000 asset limit, but legal tools like special needs trusts can protect your benefits. Always discuss this with your attorney before accepting a settlement.

What to Expect: Medical Bills Timeline After a Colorado Accident

Understanding the timeline helps you plan and make informed decisions:

Immediately After the Accident: Seek medical treatment without delay. Your health insurance covers immediate care. Emergency room bills are typically sent to health insurance first.

Weeks 1-4: Medical providers bill your health insurance. You receive Explanation of Benefits (EOB) statements. Continue all necessary treatment.

Months 1-6: Document all treatment and expenses. Your health insurer tracks what they’ve paid. The at-fault party’s insurance investigates the claim.

Settlement Phase: Final treatment is completed. Your attorney sends a demand to the at-fault driver’s insurance. Negotiations begin.

After Settlement: Health insurer seeks subrogation repayment. Medical liens are resolved. You receive your remaining settlement funds.

Talk to an Experienced Colorado Personal Injury Attorney

It is crucial to recognize that health insurance and personal injury claims can coexist, each serving its own distinct purpose. While health insurance covers immediate medical expenses, personal injury claims aim to secure compensation for multiple types of damages. To navigate this complex terrain effectively, seek the guidance of an experienced personal injury attorney in Colorado. We can assess your case value, address medical liens, and ensure you receive the compensation you deserve.

If you have suffered injuries due to another party’s negligence, consult with the experienced personal injury lawyers at Bowman Law firm to ensure you receive the support you need to recover and regain control over your life. 

Schedule a free consultation to speak to one of our personal injury attorneys about your claim. Our office is located in Denver and we serve Colorado Springs, Boulder, Fort Collins, Aurora, and the surrounding areas.