If I am Hurt and My Health Insurance Pays my Bills Do I have to Pay Them Back?

Did you see the Jets play the Chargers the other day?  The Jets had a defensive lineman who broke his hand midway through the game.  He went to the sidelines where they taped him up and sent him back into the game.  He looked like he had a big black club at the end of his arm.  He could play defense but it was hard for him to grab onto the opposing quarterback, David Rivers.  As a Colts fan, I hope Peyton Manning doesn’t get clubbed by the guy.  The point I am trying to make though has to do with insurance, not the injury itself. 

If you are in a car wreck, highway accident or a motorcycle wreck with a drunk driver, chances are high that you are going to go to a hospital.  If you are hit by a semi tractor trailer your injuries can be quite severe.  They may include a back injury, spinal cord injury, paralysis, brain injury, amputation or severe burns.  Good accident attorneys and injury lawyers know that traffic accidents are a major cause of injury and lost productivity in the United States.  One of the first things you will be asked at the hospital is for your insurance information.  Which one of the three potential insurances do you give them?  You will be tempted to give them the insurance company for the person who caused the road accident.  The immediate problem with this is you probably do not know the name of that company when you are in the hospital.  Good accident lawyers can obtain this information for you, but when you are the hospital, you will not know.  That is okay, the liability insurance carrier for the person who caused the traffic accident will not pay your medical bills as they come due.  The insurance company for the person who caused the vehicle accident will only pay you a one-time settlement, and only if you sign a full release.

This leaves you with the two other kinds of insurance available to you, your health insurance and the medical payments insurance on your car.  In previous blogs we discussed what Medical Payments Insurance is, we will not address that here.  We really do not need to discuss the difference between the two types of insurance here, because the obligation to pay these insurance carriers back is the same.  The fact is you give the hospital one or the other of these two types of insurance and these insurance carriers will pay your medical bills. Now to the heart of the matter- do you have to pay either or both back when you settle your claim with the insurance carrier for the person who caused the motorcycle accident?

The short answer is probably yes.  Most policies contain a subrogation paragraph.  Subrogation is just a fancy word meaning obligation to reimburse.  The paragraph states something to the effect that you agree to reimburse your insurance carrier out of any money you receive from the person who caused the fatal accident.  So how much do you have to repay?  The maximum you will have to pay (this discussion does not apply to an ERISA health program) is 66 and 2/3% of the amount the health insurer paid.  This is because of the existence of Indiana Statutes which require the company requesting repayment to share the cost of collecting your money (I.e. attorney fees).  If you were partially the cause of the highway accident, or there was not enough insurance available to compensate you for the entire amount of your injuries, the company claiming reimbursement will have to accept even less.  This is because you are not being fully compensated, so the insurance company claiming reimbursement is not entitled to being fully repaid. 

If you collect nothing from the person who caused the accident then you do not have to repay your health insurer anything.  Next time we will discuss construction injuries and workers compensation issues.

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