Automobile Medical Payments Coverage and Health Insurance
Finally, a Great Decision for Consumers and the Injured
Golchin v. Liberty Mutual Insurance Co.
The Massachusetts Supreme Judicial Court, in holding that insurance companies must pay optional medical payments benefits in those cases in which the health insurance has already paid has corrected years of mistakes by the Court of Appeals and the Insurance Commissioner. In the recent Golchin v. Liberty Mutual decision, the court basically held that the standard auto policy means what it says, and that the insurance companies and their enablers need to stop torturing the language of the policy. In the determining when medical payments (“MedPay”) benefits kick in, the policy states that MedPay pays bills that are “not payable under PIP”. Clearly, that would mean that if the car insurance is already paying the bills through the Personal Injury Protection Benefits, that it does not need to pay them a second time through MedPay. However, if the auto insurance is not paying the medical bills under PIP, then MedPay does kick in if the insured purchased that optional coverage. Amazingly, the insurance companies have claimed for years that a third type of medical bills exists not mentioned in the standard auto policy, bills which were paid by health insurance. Not only does the standard auto policy not create such a third category of bills, but the facts that Golchin make clear that it should not.
The Plaintiff in this case was severely injured having over $100,000.00 in medical bills. The health insurance reduced the bills and paid over $30,000.00 and asserted a lien for that amount against the Plaintiff’s settlement. The Plaintiff had purchased $25,000.00 in MedPay coverage from Liberty Mutual, and Liberty Mutual refused to pay. Of course, if the Plaintiff did not have health insurance, Liberty Mutual would have paid every dime of that $25,000.00, and the entire $8,000.00 of PIP. In this particular case, the Plaintiff was actually out of pocket that $25,000.00. The insurance company tried to impose its tortured reading of the standard auto policy and deny the payment of these benefits, which the Plaintiff had paid for voluntarily. The Supreme Judicial Court rejected this argument. These bills were not payable under PIP, therefore they were payable under MedPay.
However, this decision is broad enough that even if we do not have a situation where the health insurance has asserted a lien, which we often do not have, the MedPay would still have to pay. The Supreme Judicial Court has made clear there are only two classes of bills, those payable under PIP and those not payable under PIP. Secondly, the Supreme Judicial Court specifically addressed this issue of double recovery, which is to say getting paid by both the health insurance and the MedPay. Its conclusion was that this is what the standard auto policy calls for, and if anybody is unhappy with that; they should seek to change the standard auto policy. The Supreme Judicial Court is not going to rewrite something in which the language is plain. It cited an earlier decision (Bearce) in which the Supreme Judicial Court addressed this exact issue in the context of MedPay and uninsured motorist benefits. In that case, the same insurance company was paying the same medical bills twice, once through MedPay and another through the settlement of the uninsured injury claim. Here again, there is an offset for medical bills that are paid by PIP at settlement time, but there is no offset for medical bills paid by health insurance or by MedPay. Again we had a situation where the policy and the law is very clear, and the Supreme Judicial Court was not going to write in offsets that the Legislature did not write. The Legislature did give a PIP offset, it did not give a MedPay offset. PIP is compulsory and Medpay is optional and that would explain the difference