I’ve written a number of posts on insurance subrogation and how our government is protecting the insurance companies at the expense of innocent victims. The tragedy of insurance subrogation is that if a person is injured as a result of the negligence of another person (such as through an auto accident or medical malpractice) and the victim brings suit against the person who caused the injury, then the victim’s health insurance company sweeps in to snatch up the money received from any settlement or verdict. If the health insurance company falls under the Federal Government’s definition of an ERISA plan (which most do), Federal law says that the health insurance company is entitled to a full reimbursement of any money that it paid out for the victim’s medical treatment — Even if this means that the victim is left with nothing. Of course, the health insurance company does not pay the victim back for the thousands of dollars that the victim paid the health insurance company in premiums! The link below is for a news video detailing a case in which a widower was the victim of ERISA subrogation. The news story gives an excellent portrayal of how insurance subrogation applies to the detriment of innocent victims. I highly recommend this video:
I frequently have potential clients who contact me with questions about who is responsible for their medical bills following a car wreck. These individuals are often under the impression that they should not use their Health Insurance to cover medical bills for treatment of the injuries that were caused by the automobile accident. They also frequently believe that the at fault driver’s Automobile Insurance will pay for their medical bills directly. Unfortunately, it is extremely rare (in fact, almost unheard of) for the at fault driver’s Auto Insurance Company to pay for the injured person’s medical bills directly or quickly reimburse the injury victim for these expenses.
Auto Insurance Companies are in business to make money and, as a result, their objective is to pay injury victims as little as possible for their injuries. Unfortunately, most Insurance Companies will not reimburse an injured person for medical expenses until the injured person has fully completed all of his or her medical treatment and has agreed upon a settlement amount to cover ALL of the injured person’s losses due to the injury (such as lost wages, medical expenses, and any future lost wages). This approach creates a tremendous problem for people who do not have Health Insurance. Often the individual cannot afford the necessary health care. The Insurance Companies see this as a great windfall for them, because if the injury victim cannot afford to get the necessary health care, then the Insurance Company does not have to repay the injury victim for those medical expenses! It is a terrible scam that Insurance Companies use to take advantage of innocent victims, but unfortunately in Texas it is legal. Read the rest »