What Happens If Medical Bills Exceed Policy Limits?

Medical insurance can be a lifesaver when unexpected healthcare expenses come out of nowhere. But what happens when those bills just keep piling up, your policy limits aren’t enough to cover them? That’s when patients often find themselves struggling with out-of-pocket costs they didn’t see coming. Knowing your options, your rights, and the potential solutions can help you navigate that challenge.

What Those Policy Limits Mean

Your medical insurance policy comes with a limit on what it will cover. That means it will only pay for medical expenses up to a certain point. Anything beyond that is your responsibility. Those limits vary widely depending on the type of policy you have and the coverage plan you’re on. Understanding where those limits are and how they work is key to avoiding medical debt and planning for those extra expenses.

Understanding these limitations is crucial to avoid unexpected medical debt and plan accordingly for additional expenses.

What to Do When Medical Bills Exceed Coverage

If your medical expenses go beyond your policy limits, you have several options to manage the remaining balance.

Negotiate Medical Bills with Healthcare Providers

Hospitals and healthcare providers will often negotiate on unpaid medical bills. You can:

• Ask for discounts or financial assistance programs.
• Set up a payment plan with lower monthly payments.
• Get itemized bills to make sure you’re not overcharged.

Use Secondary Insurance or Supplemental Coverage

If you have secondary insurance or supplemental coverage, it may pay for additional medical expenses. Options include:

• Medicare or Medicaid for eligible patients.
• Gap insurance for out-of-pocket expenses.
• Critical illness insurance for specific diseases like cancer or stroke.

Legal and Financial Help for Uncovered Medical Expenses

If you can’t pay the excess medical bills, legal and financial help may be available.

Can You Sue Someone Else?

If someone else is responsible for your injuries (e.g. car accident) their liability insurance may cover the extra costs. Consult a lawyer to see if you can get compensation.

Debt Relief and Medical Bill Forgiveness Programs

If you can’t pay, you may qualify for:

• Hospital charity programs that offer partial or full forgiveness.
• Debt consolidation loans to manage medical expenses.
• Bankruptcy (as a last resort) to get rid of overwhelming medical debt.

FAQs

Who pays for damages that exceed what the minimum policy amount covers?

If damages exceed your policy’s minimum coverage, you are responsible for the balance. You may have to pay out-of-pocket, negotiate a payment plan, or seek legal options. In some cases, the other party may sue you to recover the excess.

What happens if someone sues you for more than your insurance covers in NY?

In NY, if a lawsuit exceeds your insurance coverage, you must pay the difference out of pocket. The court can seize assets, garnish wages, or enforce liens to pay the balance. An umbrella policy can protect you from such claims.

What happens if the at-fault party doesn’t have enough insurance to pay your claim in Tennessee?

If the other driver in Tennessee doesn’t have enough insurance, you can file a claim under your uninsured/underinsured motorist coverage. If you don’t have this coverage, you may have to sue the other party personally. But recovering from them depends on their financial situation.

What is the maximum the insurance company will pay per accident?

The most the insurance company will pay per accident is the policy limits. This includes bodily injury and property damage limits in the policy. Anything above those limits is the other party’s responsibility or their assets.

Bottom Line: 

When medical bills go beyond policy limits, it’s overwhelming. But options like negotiating medical expenses, using secondary insurance, seeking legal help, and applying for financial aid can help. Knowing your rights and options will help you manage medical debt wisely.