Medical Payments Coverage vs. Health Insurance: Must I Carry Both?

Auto insurance and health insurance can be very expensive. The premiums really do add up.  What insurance do you need and what can you do without?  Most auto insurance policies offer a type of coverage called Medical Payments, often abbreviated as Med Pay.  Depending on the company, you can usually purchase it in amounts such as $1,000, $5,000, $10,000, $25,000 or $50,000 per person, per accident.  Should you be injured in a collision, Med Pay coverage pays for medical expenses (and funeral costs, if necessary) resulting from the accident for you and for all of your passengers.  It also pays for you or your family members who may be injured while riding in someone else’s car or while walking.

Not all states require you to carry Med Pay insurance, so check with your state’s insurance regulatory office to see what is mandatory.  Some states follow a “no-fault” auto insurance scheme.  These states* have a form of medical payments coverage called Personal Injury Protection (PIP) which covers your medical bills, but may also cover other losses, such as lost wages, cost of child care, etc.  Some no-fault states offer both PIP and optional Med Pay coverage.

Med Pay and PIP vs. Health Insurance
If you have a health insurance policy either through your job or individually, you may be wondering why you would need Med Pay or PIP coverage at all.  If your state doesn’t require these coverages on your auto insurance policy, you can certainly save some money if you forego them or carry only a small amount.  Your health insurance, however, may have some limitations that the PIP or Med Pay do not in terms of where and from whom you receive your medical treatment. 

For example, if you belong to an HMO, you might have to go to the HMO’s facility when you’d prefer to see an outside physician.  There are no such restrictions with your auto policy’s coverage; it may be worth it to you to have that flexibility.  Further, your health insurance might cover your family members, but if you have unrelated passengers in the vehicle, they will have to have their own health or medical coverage if you do not carry Med Pay that would cover their medical expenses. 

In addition, depending on the type of health insurance you have, there might be a high deductible that you have not yet met, and/or copayments, and a lot of your treatment may, as a result, have to be covered by you, out-of-pocket, if you are solely relying on health insurance.  Med Pay and PIP typically have no deductible and cover you 100% from the first dollar up to the policy limits.

Moreover, if you live in a “no-fault” state and you have PIP coverage, that will pay for your lost wages should you need to take time off from your job due to your accident-related injuries.  Your health insurer will not provide that for you. 

It often pays to have both Med Pay (and/or PIP) coverage as well as health insurance if you can afford it. Weigh it out for yourself and see what makes the most health sense and the most financial sense for you and your family. 


*The states that currently have some form of no-fault auto insurance are: Colorado, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah, plus Puerto Rico.