Once or twice a week I hear from a victim of a motor vehicle accident who tells me that when they contacted their health insurance, they were told that because it is an auto accident, their insurance won't pay for the medical care. Once we address that issue, the next question is whether they have to repay health insurance from the settlement. Both are great questions and we will attempt to address both questions in this article.
A) DOES MY HEALTH INSURANCE HAVE TO PAY?
Health insurance cannot deny payment for your auto-related medical
expenses. The laws in Colorado changed in 2003, ending the "No-Fault"
system. So health insurance companies who tell you that medical expenses
related to auto accidents are not covered are simply providing you a
stock answer that is 7 years old. Submit your medical expenses to your
health insurance. If they fail to pay these expenses within 45 days,
consider contacting us for help.
B) DO I HAVE TO PAY MY HEALTH INSURANCE BACK?
Nearly every health insurance policy contains subrogation language. Subrogation is the notion that if you recover money from a party that is reimbursing benefits paid by the health insurance company, the health insurance company has the right to be repaid for what they paid on your behalf.
However, even though most policies give the insurance company the right to pursue such benefits, not every insurance company actually pursues these reimbursable expenses. Even with permissive subrogation language in their policy, if the company stays silent and fails to send you notice of their intent to be paid back, then you will not have to pay them back. WATCH OUT!!! This advice by no means relates to Medicare, Medicaid, Workers Compensation or Veterans Benefits. They have liens and rights even when they do not directly alert you of their intent to be paid back. This advice is only applicable to traditional health insurance.
Next, even if health insurance does provide you notice of their intent to seek subrogation, the amount you have to repay is generally negotiable. They will often give you a reduction of 20-30% simply on request. However, in more catastrophic cases, I have negotiated full waivers by the health insurance companies simply by telling them my client's tragic story. On one occasion I had a health insurer waive over $600,000 of subrogation benefits. If you don't ask, you don't get.
Lastly, as noted in our recent articles, if you settle your case on or after August 11, 2010, there is now an entire process designed to give people a forum to avoid payment of subrogation when the payback of such benefits would result in the injury victim not achieving full compensation for the extent of their damages and losses.
Health insurance should be utilized in auto-related injuries. They cannot avoid paying benefits simply because this is an auto-related injury claim. If they tell you that, submit your bills anyway. The person you talked to on the telephone probably doesn't have updated information about Colorado law. Our laws changed 7 years ago, and yet on many occasions our clients are misinformed by their health insurance company.
Once they pay, generally the health insurer does have a right to pursue repayment of the benefits paid from any settlement received from the at-fault party or, more commonly, his auto insurance company. However, in order to get repaid, they have to give you notice of their intent to seek subrogation. Furthermore, even if they give you such notice, they are generally willing to negotiate. Lastly, injury settlements occurring after August 11, 2010 make it even more difficult for a health insurance company to be paid back from your settlement, provided that you or your attorney are knowledgeable about how to proceed.
At Anderson, Hemmat & McQuinn, we would like to help you if your health insurance is denying payment based on the fact that your injuries arose from a car accident. Call us today to discuss our strategy for handling these situations.