Why Do I Have To Pay My Health Insurance Company Back From My Personal Injury Settlement?
Every major health insurance company that I am aware of has provisions in their insurance policy that allow them to recover, from your settlement, for expenditures that they made for medical care for an injury caused by an at-fault third-party. Why Do I Have To Pay My Health Insurance Company Back From My Personal Injury Settlement? Yes, either the policy or the substantive law of subrogation likely allows insurance companies responsible for medical and other related expenses incurred in the wake of a personal injury-causing event to recover the amounts expended from the person responsible for causing the situation. The process is to place a “lien” on any recovery. The most common reaction I get from those unfamiliar with this process is something to the effect of:
“Why do I have to pay my health insurance back don’t I already pay premiums for that coverage ?”
That is a pretty solid argument, at least on the face of it. If an individual is covered under a traditional premium-based health insurance policy, particularly one in which that individual pays the full premium as opposed to an employer-paid plan
“Why should they have to pay premiums for health care insurance, and also pay back the insurance company back for the cost for that care?”
That argument doesn’t carry the same weight where the individual is a recipient of Medicaid benefits, or Maryland medical assistance benefits, or another need-based program under which they may not actually pay health insurance premiums out of pocket.
However, in a situation where an individual is buying all or part of their health insurance, they may have a seemingly legitimate question as to why they must reimburse an insurer for injury-related treatment. It’s important to understand if there is no at-fault individual there is no reimbursement. By way of example only, suppose an individual is afflicted by a serious illness requiring multiple hospitalizations, surgeries and lengthy and protracted care. In this scenario, there is no person responsible for this unfortunate illness, and there would be no reason or call for the unfortunate individual to reimburse their health insurance company for the multitude of expenses incurred. It is only where another individual, through an act of negligence, or perhaps intent, causes an injury to an individual, and a health insurance provider steps in to pay for the medical expenses associated with that injury that the reimbursement scenario arises. If there is no at-fault party or guilty actor, there is no reimbursement.
This is a difficult concept for an injured person to swallow. This is perhaps best described as the law placing the burden for a loss with that individual most responsible. Of the three involved entities- insurance company, at-fault party and victim, of course, the at-fault party is the one most responsible for the event. The reimbursement, although paid by the injured person, actually comes from the funds provided by the at-fault party or their insurance company. In fairness should pay for the event the injury causing it.
🏥 Health Insurance Subrogation in a Baltimore Personal Injury Case: An Illustrated Example
📘 What Is Subrogation?
In a Baltimore personal injury case, health insurance subrogation occurs when a health insurer seeks to recover money it paid for your medical treatment after you receive a settlement from the at-fault party’s insurance company. It has historically been said subrogation allows the insurer to step into your shoes and recoup what it paid out for accident-related treatment.
🧑⚖️ Real-World Hypothetical Example: Car Accident in Canton, Baltimore
Let’s take a closer look at how this could work with a practical, local example.
Maria, a schoolteacher living in Canton, Baltimore, is rear-ended at a red light on Eastern Avenue. She sustains a concussion and a shoulder injury that requires MRI imaging and physical therapy. Her BlueCross BlueShield plan pays $14,000 for her medical care.
Maria hires a Baltimore personal injury lawyer and later settles her injury claim with the at-fault driver’s insurance for $60,000. This amount includes:
- $25,000 for past and future medical bills
- $10,000 for lost wages
- $25,000 for pain and suffering
The day after the settlement, Blue Cross sends a subrogation demand letter seeking reimbursement for the $14,000 it paid.
✅ Important considerations:
- ERISA vs. Non-ERISA Plans
Employer-sponsored plans governed by ERISA may supersede Maryland law and allow broader subrogation rights. - Attorney Negotiation
A skilled Baltimore injury attorney may negotiate a reduction of the subrogation claim, especially if legal fees were involved or the injured party’s total damages exceeded the settlement.
📝 Step-by-Step Breakdown
- Injury occurs and health insurance pays medical bills.
- Personal injury settlement is reached with the at-fault driver’s insurer.
- Health insurer asserts subrogation claim.
- Baltimore personal injury lawyer reviews and negotiates the claim.
- Subrogation amount may be reduced, waived, or paid.
💡 In Summary
If you’re injured in an accident in Baltimore and your health insurer pays for your treatment, you may face a health insurance subrogation claim once you settle. The right legal strategy — including applying the made whole doctrine or challenging the plan’s terms — can help reduce what you owe and maximize your net recovery.
❗ FAQ: Health Insurance Subrogation in Baltimore
Q: Do I always have to repay my health insurer after a settlement?
A: Not always. It depends on your plan, how much you recovered. A lawyer can help you evaluate.
Q: Can subrogation take all of my settlement?
A: No. Maryland law and negotiation practices usually prevent this from happening.
Q: Should I talk to a lawyer about this?
A: Yes. A Baltimore personal injury lawyer can protect your rights and potentially save you thousands of dollars.
Cases can be complex. I have handled thousands over the years. I extend a complimentary case analysis and opinion about their legal case to those that consult with me. Please call me today to arrange a meeting.
- Baltimore Personal Injury Trial Lawyer Eric T. Kirk
- Legal Analysis & Case Studies
- Baltimore Insurance Claims Denial Lawyer
For over three decades, I have battled against the nation’s largest insurance companies, always endeavoring to ensure my clients receive the compensation they deserve. As lead counsel in thousands of cases across Maryland, New York, and Florida, I have recovered millions for clients whose claims were wrongfully denied and delayed. Whether denying fair compensation for a personal injury victim or denying benefits to a homeowner, Insurance companies employ policy exclusions, technicalities, and lowball offers to deny and defeat claims. They also hire very good lawyers to fight you in court. So should you. When an insurance company unfairly rejects a claim, I stop them.
