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Health Insurance

Sometimes, we have clients that are fortunate enough to have health insurance when they’ve been injured in an accident. We always encourage our clients to let their health insurance pay on their accident related expenses. Often we will hear, “Why should my insurance have to pay when the accident wasn’t my fault?” The answer is simple: Because the law allows you to do so.

If you’ve read our sections on liability and medpay, you know that you can recover from both of these insurance sources for injuries sustained as a result of someone else’s negligence. But you can also collect from your own health insurance company in addition to the liability and mepday benefits.

Here is how it works:

  • You are in an accident as a result of someone else’s fault. You have three sources of potential insurance coverage to help pay your medical expenses:
    • The at fault driver’s liability insurance
    • Medpay benefits on your own automobile policy
    • Health insurance benefits
  • You should first have your health insurance immediately pay on medical expenses as they are incurred. You then submit the same exact medical expenses to medpay which will pay up to the amount of the medpay policy limits. You then submit your same exact medical expenses to the liability insurance company for payment. Sounds like you are getting triple recovery, right? Well, in a way you are. North Carolina has a law called the “collateral source rule” that says that liability insurance companies cannot take into account insurance payments made from a collateral source when paying for the value of your claim. In essence, the liability insurance company is not allowed to consider that you received both health insurance and medpay benefits. How does this practically work:
    • Let’s say you have incurred $10,000 in medical expenses. You have health insurance through Blue Cross/ Blue Shield and you have medpay benefits for $2,000 from your own automobile insurance.
      • You first submit your medical expenses to your health insurance. Let’s say you have a deductible that has already been met so your health insurance pays 100% of your bills and you have a zero balance that needs to be paid.
      • Even though all of your bills have been paid with health insurance, you can still submit your $10,000 in expenses to your medpay policy. Now, with only a $2000 limit you only will get paid $2000 but now, that money can go in your pocket because your medical bills are already paid with health insurance.
      • Now it is time for you to settle your case with the liability insurance company. You will submit the full $10,000 in expenses to the liability insurance company, even though your bills have been paid. The liability insurance company cannot consider you had health insurance and medpay available.

There is another very good reason to let your health insurance company pay your bills as they are incurred. It keeps the doctors and hospitals happy. Personal injury claims can often take months, sometimes years to settle. Doctors and hospitals do not like waiting that long to get paid from your accident claim. By using your health insurance, you will prevent harassing collection phone calls which is a stressor no one needs.

What is Subrogation?

Subrogation in its technical form is an insurer’s right to collect against a third party for reimbursement of benefits it has paid on behalf of its insured. In simpler terms, it is an insurance company’s right to get paid back. In the context of health insurance, your health insurance company may have a right to subrogation against your personal injury claim (right to be paid back) for benefits that they pay out on your medical expenses. This is something that we verify before we settle your case. Often we will work with your health insurance carrier to negotiate a lesser amount to be paid back equaling more money in your pocket.

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