Where can I find information regarding California law for ins settlements vs hospital debt
I was told that they can only take 50% of what I settled for... is this true.

No, you have to consider all of the bills before you reach a settlement, unless you have some pre agreed to settlement with the hospital, you owe the entire bill as it is billed.

It is not their issue if you would agree to an settlement that does not cover their costs.

Also often in car accidents the majority of the bill may be hospital bills.