Can My Health Insurance Take My Personal Injury Settlement?
Yes it is true under certain circumstances. If you are injured in an automobile accident, your medical bills will first be paid from any medical coverage available to you under any automobile insurance policy from which you can draw coverage. Once those benefits are exhausted, your health insurance will cover insured expenses. If you do not have health or automobile insurance, or if you exhaust all of the limits of benefits of both, you may be eligible for medical assistance benefits.
Under some circumstances, insurance companies that pay out on claims are “subrogated” to any money the injured insured later wins in a lawsuit. If, for example, a workers’ compensation insurance company pays benefits to a worker injured by a defective workplace machine, that insurance company is entitled to reimbursement if the worker later sues the machine manufacturer and wins.
However, Pennsylvania law broadly forbids insurance companies from demanding subrogation rights to the money won by injured persons who bring lawsuits over motor vehicle accidents. So, if your automobile or health insurance company paid your medical bills from an automobile accident injury, you do not have to pay the company back if you win a personal injury award – unless you have insurance through a “health maintenance organization,” or “HMO.”
Recently, the Pennsylvania Supreme Court analyzed the precise language of the Pennsylvania HMO statute and decided that the statute bars subrogation only for insurance companies and other health-care programs but not for HMOs. If you have a claim against a negligent driver, and some or all of your medical bills were paid by an HMO, you must consult with the HMO before settling your claims. The HMO will be entitled to reasonable reimbursement. Examine your health insurance information. With most health insurance companies capping maximum lifetime benefits, and now that HMOs are allowed to seek reimbursement for medical bills, it is wise for Pennsylvania consumers to examine their choice of medical benefits coverage under their automobile insurance policies. All Pennsylvania automobile policies must provide a minimum of $5,000 in medical coverage. Especially if you have HMO health coverage, consider boosting your medical coverage under your automobile policy now. The cost is often very affordable, and it is wise to maximize the medical coverage available to you for automobile accidents.
There is also another way that your health insurance can take part of your settlement proceeds. If you have a self-funded health insurance plan from your employer, you may have to pay the insurance company back the amount that it paid for your medical bills. We will explain this type of health insurance payback in another blog entry.
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