Who Pays Veterans' Medical Bills After an Auto Accident?

Who pays the medical bills when a military veteran gets into an auto accident in Michigan? Is it the Veterans Administration (VA) or the person's no-fault auto insurance provider? A recent published Michigan Court of Appeals decision sets the record straight.

Veterans' Medical Bills Can Be Covered by VA Benefits 

Veterans and active military personnel are entitled to receive medical treatment at no or reduced cost in military hospitals and other treatment facilities supervised by the Veterans Administration. This is a benefit of their employment while on active duty. However, once they are discharged, VA hospitals often become a last resort when other forms of insurance are unavailable. Now one auto insurance provider has argued that access to treatment means it doesn't have to pay veterans' medical bills after an auto accident.

Do Insurance Companies Have to Pay for Veterans' Medical Bills?

The issue was raised in a recently published Michigan Court of Appeals case, Batts v. Titan Insurance Co, Docket No. 335656. Mr. Batts was a military veteran. He was severely injured when a vehicle struck him while he was riding his motor scooter through an intersection. The driver ran a stop sign, struck Mr. Batts's scooter, and then drove away.

Because Mr. Batts had no other access to no-fault insurance (he did not have an auto insurance policy or live with a relative who did), he filed to have his medical bills and attendant care costs paid for through the Michigan Assigned Claims Plan. This plan ensures that the victims of motor vehicle accidents are able to receive PIP benefits by assigning each case without access to another policy to an auto insurer that does business in the state. In Mr. Batts' case, that was Titan Insurance Company.

Are VA Benefits Health Insurance?

Titan claimed that it should not have to pay the United States government for medical treatments provided to Mr. Batts because as a military veteran, he had health "insurance" coverage through the VA as long as they receive treatment within the VA system.

In creating the Assigned Claims Plan, the Michigan No-Fault Act says that the assigned insurer is not required to pay for any losses covered by benefits from other sources. Where such other sources exist, such as when a person has health insurance or receives workers' compensation benefits, those benefits are "coordinated" with the assigned claim, and the assigned auto insurance provider is only responsible for the difference between the medical bill and the amount covered by the benefit.

As a simplified example, imagine Mr. Batts had a traditional HMO health insurance policy with a $5,000 deductible and 20% co-insurance and co-pays. Also imagine that Mr. Batts had a total of $100,000 in medical expenses. When he filed his assigned claim, Titan's payment obligations would be coordinated with the HMO coverage. The HMO would pay for whatever was covered under its policy, in this case 80% of all medical bills after the first $5,000 deductible, or $76,000. Then Titan would be responsible for whatever additional reasonably incurred medical expenses remained, in this case $24,000.

Titan argued that Mr. Batts's VA benefits should be treated the same way as other forms of health insurance. Since Mr. Batts's medical bills were "covered" by his status as a veteran, Titan shouldn't be required to pay anything.

But the Michigan Court of Appeals disagreed. It refused to allow Titan to coordinate Mr. Batts's coverage after the fact, noting that Mr. Batts had not made the voluntary decision to purchase a coordinated no-fault policy.

Does an Insurance Company Have to Pay Back the VA? 

The court also said the VA is more of a medical provider than a health insurance company. It has the same right to recover payment for medical care provided to its veterans as any private hospital or medical facility. In fact, there is a federal law that says so. 38 USC 1729 says that the United States has the right to collect reasonable charges incurred as a result of a non-service-connected motor vehicle accident. The court ordered that Titan was not entitled to a set-off because Mr. Batts was not active in military service when he was injured. The court ordered that Titan was to pay for the plaintiff's medical bills, including those incurred by the VA because of his status as a veteran.

At Sachs Waldman, our experienced personal injury attorneys know how to help the victims of serious injury car accidents, whether they are veterans, have coordinated policies, or need to resort to an assigned claim. We will review your case, and your needs, and help recover all of your PIP benefits. Contact our Detroit personal injury law office at 1-800-638-6722.