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How Does Medicare Affect My Auto Accident Claim?

colorado auto accident and medicareThe aftermath of an auto accident can be a difficult and intimidating time for the victim. As part of your recovery you will probably have to deal with hospitals and medical bills. And, as you most likely know, healthcare can be extremely expensive. In most situations, the at-fault driver’s insurance company will be liable for your medical care.  Additionally, your own car insurance may be able to help with medical payment coverage, unless you waived the coverage when signing up for your insurance. Then, there is always your own health insurance, whether private or government (Tricare, Medicare, and Medicaid), which can help. If you have health insurance, you should take advantage of this when paying medical bills from the accident.

You may also have to deal with a subrogation claim by your health insurance company. Subrogation is a legal principle that prevents victims from being compensated twice for an injury. In this situation, one party is substituted for another party whose debt that party pays. For example, if your health insurer pays for your auto accident injuries and you then receive compensation for those injuries from the auto insurance company, your health insurer may recover the money it paid toward those injuries.

In many cases, insurers may have contractual or statutory rights of subrogation. In relation to Medicaid, its rights of subrogation are extensive. See C.R.S. § 25.5-4-301. This isn’t something to be wary of; subrogation will be dealt with prior to settlement. However, it is important for you to seek the legal advice of an experienced personal injury attorney to help you with this matter.

Colorado’s Make Whole Statute and Medicaid as Collateral Source

There’s more you should know about when it comes to Medicaid and your auto accident claim. In the Colorado Court of Appeals opinion from 2013, Smith v. Kinningham, the Court clarified that Medicaid benefits are a collateral source.

Firstly, the Colorado legislature previously enacted the Colorado Make Whole Statute, C.R.S. § 10-1-135, which is a kind of “anti-subrogation” law. The statute is intended to limit subrogation claims against third party recoveries. This statute eliminates a subrogation right in situations where the injured party has not been “made whole” (in other words has not fully been compensated).

Additionally, this statute does forbid insurance companies from informing juries that health insurance companies often pay at a lower rate than the hospital previously billed. If this occurred, it could cause the jury to value an injured party’s injury at less because that is what the health insurer paid.   Medicaid, as a benefit for those who are indigent, could be poorly looked on by a jury since Medicaid obviously pays at a much lower rate than billed medical fees.

Therefore, the court in Kinningham had to look at whether Medicaid was a “collateral source,” because if it was, then those benefits would be inadmissible in trial pursuant to C.R.S. § 10-1-135(10)(a), which governs that collateral source payment or benefits shall not be admitted as evidence. A collateral source in this context is a “person or company wholly independent of an alleged tortfeasor that compensates an injured party for that person’s injuries.” Smith v. Jeppsen. In other words, a collateral source is a third-party, a separate party to the action who is not related to the at-fault party, who has provided compensation to the injured party for his or her injuries. In this case, the benefits were paid on the injured party’s behalf and were not related to the at-fault party; thus, they were a collateral source.

Furthermore, the defendants argued that Medicaid benefits were admissible as “gratuitous government benefits.” However, the Court held that C.R.S. 10-1-135(10)(a) has repealed this exception to the collateral source rule. Therefore, Medicaid benefits were not considered to be gratuitous government benefits.

In other words, your Medicaid benefits cannot be used against you. While subrogation may play a part in your claim, getting the help you need for your injuries should be your greatest concern. Health insurance, including Medicaid, is there to help you during this time.

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