Often during personal injury cases your health insurance will cover, at least initially, some of your medical bills and payments. You expected this—you paid your premiums. What you did not expect was for Blue Cross Blue Shield (or whatever company you use) to get to take a portion of your personal injury settlement that covers what they paid out. In fact, they’ll get those medical liens paid out before you see your share of the money.
What you’re experiencing is called a “subrogation,” and it’s usually covered by your health insurance contract. The same is sure for any other insurance provider who might make an early payout during your personal injury case.
The short way to think about it is you’re not allowed to “double-dip.” You have the right to get reimbursement for your injuries, but you can’t get reimbursed twice. Someone pays that money to the medical provider, but at least a portion of your personal injury case might essentially boil down to a quibble over who pays. The good side of this process is it allows you to get paid promptly, and access some of the money that is owed to you long before a settlement resolves.
Another way to think about it is to think about something that can happen when you get involved in an accident with an uninsured driver. Your own uninsured/underinsured motorist auto policy may pay the bills, and the rest of the process is often invisible to you. What’s happening behind the scenes is they are subrogating against that driver. That is, they send the driver the bill for every dollar they paid, and can even, in some states, get their driver’s licenses suspended until they find a way to pay that bill (a great argument for keeping your insurance up to date. Nobody wants a $25,000+ bill)!
While it can feel disappointing to realize you won’t get some of the money you’d hoped for, the main thing is that your medical bills get paid and they aren’t being paid out of your own pocket. This is one of the primary reasons for a personal injury settlement in the first place. In most catastrophic injury cases you’ll still walk away with a substantial sum to place into your own bank account.
Sometimes, as your personal injury attorney, we can negotiate with these insurance companies just a little bit to reduce their medical lien, framing it as a contribution towards attorney’s fees, since they’re essentially using your attorney to gain their money back. This can also result in putting more money in your own pocket.
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