What is Medpay and Why Do I Have to Pay Them Back?

Although everyone who owns an automobile in Florida must buy PIP insurance coverages, it is not a requirement of Florida law that every auto owner also buy so called "Medpay" insurance. However, many owners do buy Medpay-in part because they want to have "full coverage". Thus, for a fairly small increase in premiums, most auto carriers will sell you Medical Payment Insurance Coverage-aka "Medpay". Medpay is insurance that like PIP (see blogs "Why do we have to use my insurance?" and "Why are they subtracting $10,000 from my jury verdict?"). Medpay will pay its benefits regardless of whether you were at fault or the other guy was at fault. Thus, like PIP, Medpay is a "No Fault" type of coverage. As its name implies, it pays for medical expenses, but not lost wages. It is designed to "fill in the gaps" of your medical expenses from a crash which PIP does not pay. Specifically, because PIP only pays 80% of any medical charge, and only up to a total of $10,000, there will be an outstanding balance with that provider for the unpaid 20% of the bill. Medpay is designed to pay that 20%, plus any other medical expenses over and above the $10,000 PIP limits, up to the limits of the Medpay coverages (Usually $5,000, but I have seen as high as $50,000).

However, unlike PIP, if your own insurance company pays Medpay benefits, that insurance company does have what is called a "right of subrogation". Subrogation is a legal term essentially meaning that the insurance company has a right to be paid back out of the proceeds of any settlement or verdict on the crash for which they paid Medpay benefits. Thus, whenever we settle a client's case or obtain a verdict after trial, the insurance company that paid the Medpay has a lien on the proceeds of that settlement or verdict that must be negotiated and paid.


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