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.
After an auto accident, treatment of your injuries should be your number one priority. If you have Health Insurance, by all means use it! If you do not have Health Insurance, there are other options that you can explore. First, you should check to determine whether you have Personal Injury Protection (PIP) under your own Automobile Insurance. This type of coverage is intended to be more accessable and can be used to cover the costs of your medical care. Some health care providers will bill directly against your Personal Injury Protection policy, although it is advisable to speak with an attorney before giving your medical providers your PIP policy information. PIP policies typically provide between $2,500 and $10,000 in coverage (with $2,500 being the most common), which frequently is not enough in the event of a serious injury. If you do not have Health Insurance or Personal Injury Protection, it is advisable to contact an attorney to discuss other possible options. Some health care providers will accept a Letter of Protection from your attorney, which essentially is a promise to the health care provider that you will pay the health care provider for your medical expenses when your injury case is resolved.
If you are injured in an accident and you use your Health Insurance to cover your medical expenses, you can expect your Health Insurance Company to later contact you by mail, asking if your medical treatments are the result of an injury. This is the first step that Health Insurance Companies take toward asserting their right to subrogation. (Subrogation is an issue that is discussed further in other posts.) If you receive a letter from your Health Insurance Company asking if you have been injured in a car accident or other type of accident, contact your attorney for advice before making any response. Do not perceive this as a reason to avoid using your Health Insurance to cover the expense of your medical treatments . . . as I said before, your medical care is priority one after a car wreck or any other type of accident and using your Health Insurance is the best way to make certain that your medical treatment is not delayed.