Do I have to pay my health insurance carrier back out of my settlement?

The answer to this question is usually “yes.” Most health insurance plans contain a subrogation clause that requires you to reimburse them out of any recovery you make from a third party who has an obligation to pay your medical expenses.

What is Subrogation?

Subrogation is the right to be reimbursed for expenses paid on behalf of another. There are three types of subrogation: statutory, contractual, and equitable.

What is Statutory Subrogation?

Statutory subrogation is where there is a specific statute or Federal law that creates a lien against any right of recovery that the beneficiary has.  Medicare and Medicaid are examples of government-funded programs that are entitled to subrogation against a personal injury claim by law.  Additionally, hospitals providing emergency service in Texas and some emergency service providers have a statutory subrogation right to recover for services rendered to an injured party if that party recovers damages from someone else for the injury. Hospital liens and Medicare liens are the most commonly seen examples of this type of lien.

What is Contractual Subrogation?

Exchanging payments

Contractual subrogation is where a written contract obligates someone to repay benefits if recovered in a personal injury action against another.  Most healthcare insurance carriers include a provision in the contract that entitles them to this type of subrogation. Thus, you should always check your health insurance policy to be sure of your contractual obligations.

What is Equitable Subrogation?

Equitable subrogation is where there may be no contract but the law determines a party should be allowed subrogation as a matter of fairness.  This rule of law is used in some circumstances to require reimbursement.

Have an Attorney Review the Insurance Policy

You should always double-check your health insurance policy and consult your attorney about the legal effects of any subrogation clause it may contain if you are bringing a personal injury claim against another for medical expenses that were paid, all or part, by a health insurance carrier. If you do not have a personal injury attorney, call Simmons and Fletcher, P.C. for a free consultation: (713) 932-0777.

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