Ask the Attorney: Insurance paying medical bills after crash

Dear Ask the Atty,

I was injured in a car accident and incurred $20,000 in medical bills.

I’m 67 so have Medicare which paid about $8,000. I paid $2,000 and the remaining $10,000 was written off. The guy that hit me only has a $25,000 insurance policy. Shouldn’t they just pay it? They only offered me $3500--$2,000 for my share of the bills and $1500 for pain and suffering. Why does the insurance company get the benefit of the $10,000 in write-offs?