Who pays your medical bills after a car accident

Medical bills after a crash have a way of arriving before anything else does, often before the insurance adjuster even calls. Crashes are expensive on a national scale, too: motor vehicle crashes cost the US economy about $340 billion in 2019, and roughly $31 billion of that was medical treatment alone¹. None of that changes what you're dealing with this week: a stack of bills that needs an answer long before any liability claim settles, and bills that keep arriving for weeks or months after the crash while the claim is still open. In the US, those bills usually get paid through some combination of three systems: your own health insurance, a state-mandated no-fault benefit called personal injury protection (PIP), and an optional add-on called medical payments coverage, or med-pay. Which of these applies, and in what order, depends heavily on which state the crash happened in.

No-fault versus tort states

About 17 states currently sell no-fault or PIP-style auto coverage; the other roughly 33 run on a traditional tort, or at-fault, system². That split decides who pays first. In a no-fault state, your own insurer typically covers your medical bills up to a set limit no matter who caused the crash. In a tort state, the at-fault driver's liability insurance is ultimately responsible, but that claim can take months to resolve, so health insurance or med-pay usually carries the bills in the meantime.

How PIP works in no-fault states

Personal injury protection is first-party coverage: it pays your medical expenses, and often a share of lost wages, directly from your own policy, regardless of fault. States that require it set very different limits. Florida mandates $10,000 in combined medical and disability benefits, paying 80% of medical expenses and 60% of lost income, subject to a fee schedule that caps certain services (ambulance and air-ambulance charges at 200% of Medicare rates, emergency hospital services at 75% of usual charges, most other care at 200% of Medicare Part B)³. Michigan rebuilt its system for policies issued or renewed after July 1, 2020: drivers now choose a PIP medical benefit level of $50,000 (Medicaid enrollees only), $250,000, $500,000, or unlimited, or can opt out of PIP medical coverage entirely if they carry qualifying health insurance and are enrolled in Medicare⁴. New York requires $50,000 in "basic economic loss," covering medical expenses, up to $2,000 a month in lost earnings for as long as three years, and $25 a day in other reasonable expenses, with an optional $25,000 in added coverage on top⁵.

Many no-fault states pair that first-party benefit with a limit on your right to sue the other driver for pain and suffering unless your injury clears a threshold. New York's threshold requires a "serious injury," a defined list that includes death, dismemberment, significant disfigurement, a fracture, permanent loss of use of a body part or system, or a permanent consequential or significant limitation of use⁵. Massachusetts uses a dollar figure instead of a list: you generally can't recover for pain and suffering unless your reasonable medical expenses exceed $2,000, unless the injury caused death, a lost body part, permanent disfigurement, or certain loss of sight or hearing⁶. Pennsylvania lets drivers pick their own threshold up front: electing "full tort" keeps an unrestricted right to sue, while "limited tort" trades a lower premium for giving up most pain-and-suffering claims outside of serious injuries, layered on top of the state's separate mandatory first-party medical benefit⁷⁸.

PIP benefits also aren't unconditional once they start. Florida's statute lets an insurer require an injured driver to sit for an independent medical examination or an examination under oath, and benefits can be suspended if the person unreasonably refuses or fails to appear³. New York's no-fault system works the same way in practice: insurers routinely schedule independent medical exams mid-claim, and a finding that further treatment isn't medically necessary is one of the most common reasons a PIP claim gets cut off before it reaches the policy limit⁵. Knowing an insurer can stop paying before you hit the dollar limit matters as much as knowing what that limit is.

Med-pay and health insurance in tort states

In the roughly two-thirds of states running a tort system, there's often no state-mandated first-party medical coverage at all. Health insurance becomes the practical first payer, and med-pay, an optional coverage sold alongside liability and collision coverage, fills part of the gap. Texas is a useful example: insurers must offer PIP, and a driver has to decline it in writing if they don't want it, while med-pay is available as a separate optional coverage that pays the policyholder's and passengers' medical bills regardless of fault, including injuries suffered as a pedestrian or cyclist⁹. Med-pay tends to be narrower than PIP: it usually covers medical expenses only, not lost wages, and the limits people actually buy tend to run smaller, often in the $1,000 to $10,000 range.

Why your health insurer might want its money back

Whoever pays your bills first, whether that's a PIP insurer, a med-pay insurer, or your own health plan, often has a legal right to be repaid out of whatever you eventually recover from the at-fault driver. That right is called subrogation, and it can take a real bite out of a settlement that otherwise looked like enough money.

Medicare is legally required to pay after, not instead of, an available no-fault or liability settlement, but in practice it usually pays your bills right away as a "conditional payment" rather than waiting for the claim to resolve, then seeks reimbursement once you settle¹⁰. Insurers, including auto insurers, are separately required to report settlements involving Medicare beneficiaries to CMS so it can track what it's owed, and the actual repayment gets handled through the Medicare Secondary Payer Recovery Portal¹¹. Medicaid works on a similar principle: federal law requires states to pursue reimbursement from any liable third party, and enrolling in Medicaid means assigning your right to that third-party payment to the state as a condition of eligibility¹².

Medicaid's reimbursement right is also legally narrower than it looks. The Supreme Court held in Arkansas Department of Health and Human Services v. Ahlborn that federal Medicaid law caps a state's recovery at the portion of a settlement that actually represents past medical expenses, not the pain-and-suffering or lost-wage portions of the same recovery¹³. In Wos v. E.M.A., the Court struck down a state formula that simply assumed a fixed share, usually a third, of every settlement counted as medical expenses regardless of the facts, ruling that a beneficiary has to get a real chance to show the medical portion was smaller¹⁴. Those two cases are a large part of why a carefully negotiated settlement allocation, not just Medicaid's own ledger, often determines how much actually gets repaid.

Employer health plans add another layer. Most large employers self-fund their health coverage, which puts the plan under ERISA rather than state insurance law, and self-funded plans almost always include a reimbursement clause. The Supreme Court upheld that kind of clause in Sereboff v. Mid Atlantic Medical Services, ruling a plan can enforce an "equitable lien by agreement" against settlement money that's still identifiable and in a beneficiary's hands¹⁵. In US Airways v. McCutchen, the Court went further: plan language controls how much has to be repaid, and general fairness arguments, like reducing the plan's share to account for attorney's fees, only come into play where the plan itself is silent on the question¹⁶. In practice, the exact wording of your health plan's reimbursement clause, not what feels fair, decides how much comes back out of a settlement.

Hospital liens and unpaid balances

If you're uninsured, your coverage runs out, or a hospital doesn't want to wait for a liability claim to resolve, some states let providers place a lien directly on your case instead of billing or suing you right away. California's hospital lien law lets a hospital attach a lien to any settlement or judgment you eventually recover, and anyone who pays out a settlement without honoring a properly served lien notice can be held liable for up to half of it¹⁷. Texas allows a similar lien if treatment starts within 72 hours of the crash, generally limited to the first 100 days of care¹⁸. Florida is worth knowing as the exception: its old statewide hospital lien law was struck down as unconstitutional by the Florida Supreme Court in 2012, so liens there now exist only where individual counties have passed their own ordinances under home-rule authority, meaning the same injury can be liened in one Florida county and not in the next one over¹⁹.

A related, less formal arrangement is the letter of protection: a provider agrees in writing to treat you now and collect from your eventual settlement instead of billing you immediately. These show up often when someone is uninsured and a claim is still pending, but the terms aren't standardized by statute and vary by provider and by state. If a lien or a letter-of-protection balance turns into a real dispute over how much a provider is owed out of your settlement, an attorney who handles crash cases can usually negotiate it down before any money changes hands. The legal directory is a place to start looking for one.

Commercial trucking crashes work differently

Crashes involving interstate commercial trucks run under a different federal floor. Carriers hauling general freight in vehicles over 10,001 pounds must carry at least $750,000 in liability coverage, rising to $1 million for certain hazardous materials and up to $5 million for bulk shipments of the most dangerous cargo²⁰. Truck insurance policies also have to carry an MCS-90 endorsement, which forces the insurer to pay a qualifying judgment up to that federal minimum even if the underlying policy would otherwise exclude the crash, say because of an unlisted vehicle or unapproved cargo, and then lets the insurer go after the trucking company separately to recoup the money²¹. The upshot is that bills from a serious truck crash are less likely to run into a coverage gap than bills from an ordinary passenger car crash.

One rule that doesn't help here

The federal No Surprises Act protects patients from surprise balance billing in emergency care and certain out-of-network situations, and people sometimes assume it covers crash bills too. It doesn't. Federal regulations specifically carve automobile liability coverage and medical payments coverage out of the definition of health coverage the No Surprises Act regulates²². A billing dispute tied to a car accident gets resolved through PIP, med-pay, health insurance, or a lien, not through the No Surprises Act's arbitration process.

A practical order of operations

A few habits make the payment maze easier to manage no matter which state you're in:

• Get treatment first and sort out payment second. Delaying care to save an insurer money rarely helps your health or your claim.
• Give every provider your health insurance information even if you also have PIP or med-pay, since accurate billing from the start makes coordination between coverages possible later.
• File a PIP or med-pay claim with your own insurer quickly. Many policies set a notice deadline measured in days, not months.
• Keep every bill, explanation of benefits, and lien notice you receive. You'll need the full paper trail to figure out what you actually owe once a settlement happens.
• Ask your health plan, or an attorney, whether a subrogation or reimbursement clause applies before you spend any settlement money.

What stays federal, and what changes by state

The federal layer here, Medicare, Medicaid, ERISA reimbursement rights, trucking insurance minimums, and the No Surprises Act's carve-out for auto claims, works the same no matter which state you were driving in. What changes from state to state is the first-party layer: whether PIP is required at all, how much it pays, whether a lawsuit threshold applies, whether med-pay is even sold, and how aggressively hospitals can lien your case. That's the layer worth checking against your specific state's rules before assuming any number above applies to you, since a $10,000 PIP limit in one state and a $250,000 limit one state over can change every decision that follows a crash.

This is general information, not legal advice.

Sources

1. NHTSA, "The Economic and Societal Impact of Motor Vehicle Crashes, 2019 (Revised)," DOT HS 813 403, https://crashstats.nhtsa.dot.gov/Api/Public/ViewPublication/813403

2. IIHS, "Auto insurance," https://www.iihs.org/topics/auto-insurance

3. Florida Statutes § 627.736, https://www.flsenate.gov/laws/statutes/2025/627.736

4. Michigan Compiled Laws § 500.3107c, https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-500-3107c

5. New York Insurance Law § 5102, https://www.nysenate.gov/legislation/laws/ISC/5102

6. Massachusetts General Laws c. 231, § 6D, https://malegislature.gov/Laws/GeneralLaws/PartIII/TitleII/Chapter231/Section6d

7. 75 Pa. Cons. Stat. § 1712, https://www.legis.state.pa.us/WU01/LI/LI/CT/HTM/75/00.017.012.000..HTM

8. 75 Pa. Cons. Stat. § 1705, https://www.legis.state.pa.us/WU01/LI/LI/CT/HTM/75/00.017.005.000..HTM

9. Texas Department of Insurance, "Shopping smart: Tips for buying auto and home insurance," https://www.tdi.texas.gov/pubs/consumer/cb035.html

10. 42 U.S.C. § 1395y(b); CMS, "Medicare Secondary Payer," https://www.cms.gov/medicare/coordination-benefits-recovery/overview/secondary-payer

11. CMS, "Mandatory Insurer Reporting" (Section 111, Medicare, Medicaid, and SCHIP Extension Act of 2007), https://www.cms.gov/medicare/coordination-benefits-recovery/mandatory-insurer-reporting; Medicare Secondary Payer Recovery Portal overview, https://www.cms.gov/medicare/coordination-benefits-recovery/overview/secondary-payer-recovery-portal

12. 42 U.S.C. § 1396a(a)(25) and § 1396k; Medicaid.gov, "Coordination of Benefits & Third Party Liability," https://www.medicaid.gov/medicaid/eligibility-policy/coordination-of-benefits-third-party-liability

13. Arkansas Department of Health and Human Services v. Ahlborn, 547 U.S. 268 (2006), https://www.courtlistener.com/opinion/145661/arkansas-dept-of-health-and-human-servs-v-ahlborn/

14. Wos v. E.M.A., 568 U.S. 627 (2013), https://www.law.cornell.edu/supremecourt/text/12-98

15. Sereboff v. Mid Atlantic Medical Services, Inc., 547 U.S. 356 (2006), https://www.courtlistener.com/opinion/145657/sereboff-v-mid-atlantic-medical-services-inc/

16. US Airways, Inc. v. McCutchen, 569 U.S. 88 (2013), https://www.law.cornell.edu/supremecourt/text/11-1285

17. California Civil Code § 3045.1, https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=3045.1

18. Texas Property Code, Chapter 55, https://statutes.capitol.texas.gov/Docs/PR/htm/PR.55.htm

19. Shands Teaching Hospital & Clinics, Inc. v. Mercury Insurance Co. of Florida, 97 So. 3d 204 (Fla. 2012); Florida Statutes Chapter 125, https://www.flsenate.gov/Laws/Statutes/2025/Chapter125/Part_I

20. 49 C.F.R. § 387.9, https://www.ecfr.gov/current/title-49/subtitle-B/chapter-III/subchapter-B/part-387/subpart-A/section-387.9

21. 49 C.F.R. § 387.15, https://www.ecfr.gov/current/title-49/subtitle-B/chapter-III/subchapter-B/part-387/subpart-A/section-387.15

22. 45 C.F.R. § 146.145, https://www.ecfr.gov/current/title-45/subtitle-A/subchapter-B/part-146/subpart-D/section-146.145