It’s a fair bet that more than one motorist in Annapolis, Gaithersburg, Washington, D.C., or Rockville has been dismayed to find that his or her health insurance company has demanded to be repaid for the costs that their insured toted up as a result of an automobile, motorcycle or trucking accident injury accident.
Most people who haven’t been involved in a car crash or filed a traffic-related personal injury claim would find it more than surprising that an injured party could be asked to essentially reimburse their insurance company for various medical costs incurred following an personal injury.
Certainly a party that was not at fault and has been hurt, possibly seriously, should not have to pay back costs to an insurer for a legitimate claim. As the argument goes, healthcare insurers don’t ask to be paid back for costs associated with medical treatment or other necessary physical rehabilitation, so why now?
When people hear that their health insurance company wants a refund after paying months or years of timely healthcare premiums, we as Maryland personal injury lawyers understand how this could raise more than a few eyebrows. The simple counter to this seemingly unscrupulous request from one’s own insurer is that eventually the client himself will be reimbursed for all of his or her medical costs through the auto insurance company that represents the other negligent party.
What is important to remember is that there is a legal principle know as the ‘made whole doctrine,’ which limits the ability of an insurer to exercise its right of “subrogation” until the insured has been ‘fully compensated or made whole.’ In other words, an auto accident victim covered by health insurance has priority rights to recover costs from a responsible third party. What this means is that if the victim’s recovered costs from both his insurer and the negligent party is less than the actual costs incurred by the victim the health insurance company will likely lose its subrogation interest.
What subrogation does is to allow insurance companies to recoup their own costs of reimbursing insured parties who have been injured in a traffic accident by a second negligent party. But what this also means is that nearly every single health insurer involved in a Maryland auto accident case will probably request repayment to one degree or another. This repayment usually represents the money that the insurer has expended as a result of the injury claim.
Since health insurance liens are based on a contractual agreement between the insurer and the insured, for a health insurance company to recover costs under conventional subrogation, that company typically must show that the insured assigned his or her rights to the insurer, and that the insurer made payments. This is, of course, an easy standard because ERISA plans — or any other health insurance plan for that matter — usually contains wording that is biased in favor of the insurer.
Subrogation can, in fact, be one of the most trying elements of any personal injury case. Without a doubt, this is one area that calls for the help of an experienced personal injury attorney. Whether you live in Baltimore, Anne Arundel, Howard or Washington County, it’s always advisable to contact a qualified legal professional to better understand your rights.