It's true! I get this question a lot from my injury clients too. They forget or do not realize that their health insurance is like a "glorified loan that needs to be paid back if and when they receive verdict or settlement from their injury case." I have had clients tell "why do I have to pay back a health insurance policy when I pay monthly premiums for the health benefit?" Believe me, this is not advertised out in the media, so not many people are aware of this fact. However, there is some light at the end of the tunnel, but first you should understand briefly how it works in the state of California:
1. First, this health plan reimbursement right usually applies if and when you receive a settlement from a third party (someone else's money or insurance policy). There are limited exceptions to this general rule. However, receiving a settlement from a third party happens to be a majority of the time when you settle on an bodily injury case.
2. Second, this is called a lien subrogation right and most health insurance policies, including auto medical pay benefits, have language written into the policy that allows them to collect back from your bodily injury settlement! In fact, if you have your health insurance or auto medical policy in front of you, you can look up this language in your own policy right now.
3. This is usually never discussed when you purchase health insurance, or automobile medical pay benefits because it is hidden in the policy language; also, most insurance companies do it, and you need insurance, right? So most people are unknowingly in the same boat.
Here's the Good News:
Special rules do apply and you do have California and federal law protections in place to make sure what the health plan gets back both fair and equitable in relation to your bodily injury settlement. One such rules is known as the Make Whole Doctrine, (and for those of you who would like a little more intellectual stimulation, you can read about how to effectively use the Make Whole Doctrine). That is why we personal injury lawyers have to be very good at lien subrogation negotiations.
Why Your California Injury Lawyer Better Be Worth "His or Her Salt:"
Thank God for lawyers because the above should illustrate how important this is to your bodily injury case. Your injury lawyer should be well versed in the different California state and federal rules, statutes, and case law that can help you increase your net recovery from a bodily injury settlement. Trust me, this is no easy feat. I have been practicing in California injury since 1999, and the rules of law constantly change when it comes to lien subrogation rights. I have to continually be well read in this specialized area, and sometimes other lawyers call me up to help them navigate the reimbursement sharks on their injury clients settlements. I am happy to do it too, because sometimes it is simply not fair for a health plan to take back any money from a person's bodily injury settlement.
I hope the above gives you some insight in the challenges that face you and your injury attorney when it comes time for your settlement. I trust this will also help you pose some good questions to your attorney about what he or she is going to do to help you maximize your bodily injury case. Remember, the power is still with you under California and federal law - there are built in protections that I talk about elsewhere on this website. If you are curious, and need more specific help, just call me directly at (619) 813-7955.