Why Does My Health Insurance Get Reimbursed? Subrogation is Why
Your health insurance paid your medical expenses for your bike accident injuries. Does the health insurer get paid back from the settlement for medical expenses it paid? Generally, yes. But it’s complicated.
If you receive money from either the other person’s insurance company or your auto insurance company, your health insurer is entitled to be paid back. This is called “subrogation.”
All health insurers have a right to subrogation either under the policy contract or by law. Private health insurance companies (Blue Cross, Cigna, United Health Care, etc.) all have a “contractual subrogation” clause in their policies. Other insurers such as Medicare or Medicaid are entitled to be paid back based upon statutory subrogation laws.
If the other driver’s insurer is aware of a subrogation interest, it will not settle with you unless and until the health insurer is paid back.
How much must be paid back? Well, that depends upon various factors including the contract language, whether the policy is covered by ERISA, Texas Law, Federal Law, how much total insurance is available, the nature of the damages, etc. Again, this can become extremely complicated.
What I Do. As mentioned above, subrogation can be very complicated, and sometimes it is the most difficult issue in a case. I handle all subrogation liens and most times, I’m able to negotiate a reduction of approximately 33.33% (sometimes more, sometimes less). This reduction benefits you because the less you pay your health insurer the more you get.
1 –Always, Always, Always Use Your Health Insurance: The insurance for the person that hit you never pays medical expenses for an ongoing basis, and even if they did, they would not be able to get the discounts/reductions that your health insurer can.
2 Of course, if you recover nothing, then you don’t owe your health insurer anything.
3 – Awareness of a Lien: For Medicare/Medicaid, the insurer knows about the subrogation lien because of your age and the bills. For private health insurance, your insurer may give you and the auto insurer written “notice” of subrogation lien. (They determine this usually because of the HCFA/ICD codes in the billing records.)
4 – Subrogation wants more than can be collected: There are cases where the subrogation lien is far more than the total amounts that can be collected from both auto insurers (the other person’s liability insurance and your uninsured/underinsured insurance.) In those case, I have been able to negotiate very large reductions in subrogation lien such that my client receives money.