What is subrogation, and why is my health insurance company getting money from my injury settlement?

As we have discussed before, when you have been injured in a car accident you want all of your medical bills to be submitted to your health insurance company.   Accident injury claims can take a long time to resolve, and while many medical providers will agree to place outstanding balances on hold, it’s much easier if everything gets paid sooner versus later.  In addition, health insurance carriers will have negotiated contractual rates with most of your medical treatment providers, resulting in lower amounts paid and more money going directly to you from your injury claim settlement or verdict.  And finally, there is subrogation – subrogation is the “substitution of one person or group by another in respect of a debt or insurance claim, accompanied by the transfer of any associated rights and duties”. Oxford Languages, part of Oxford University Press. 

In other words, when a health insurance company pays for medical bills that are related to your injury claim, it expects to be paid back once there is recovery on the claim.  One of the biggest things personal injury attorneys deal with on a regular basis is handling subrogation related to their clients’ injury claims. The law surrounding subrogation is complex and varies from state to state, but rarely is a health insurance company entitled to full reimbursement.  In many situations, the insurance company may not be entitled to any reimbursement at all.  There are numerous factors that will affect an insurance company’s subrogation rights, including, but not limited to, the specific insurance contract, state law, the type of health plan (i.e. private plan, ERISA plan, Medicaid, Medicare, etc.), the amount of your recovery and/or the source of your recovery.  If you have been injured in a motor vehicle accident, make sure to speak with your local injury attorney about how subrogation might affect your injury claim.