When you win a personal injury settlement, it can feel like a huge relief. This money is meant to cover medical bills, lost wages, and other expenses. But sometimes, health insurance companies may want a portion of your settlement to pay themselves back for medical costs. This process is called subrogation, and it’s something to be aware of if you’re handling a settlement in California.
What is Subrogation?
Subrogation is when your health insurance company seeks reimbursement for the medical expenses it covered after your injury. For example, if you were in a car accident and your insurance paid for your treatment, they may place a claim or “lien” on your settlement to get reimbursed.
Think of it like this: if your health insurance spent $10,000 on your hospital bills, they might ask to take that amount from your personal injury settlement once it’s paid out. Subrogation can vary depending on the type of insurance you have, so let’s break that down.
Recommended Reading: Treatment with Health Insurance versus On a Doctor’s Lien
Types of Health Insurance Plans and Their Rights to Your Settlement
Different insurance plans have different rules for subrogation:
- Private Health Insurance (like Blue Cross or Kaiser): Private insurers generally have a right to subrogation. However, in California, there are rules that may limit how much they can take.
- Government Health Insurance (like Medi-Cal and Medicare): These programs can also pursue subrogation, but they follow specific California rules that protect injured parties.
- Employer-Sponsored Plans (ERISA-based plans): Some employer-based plans may have strong subrogation rights. However, a skilled attorney can still negotiate these claims to maximize what you keep.
A personal injury lawyer can identify what type of insurance plan you have and what rights the plan may have to your settlement.
How Health Insurance Companies Pursue Subrogation in California
Once you settle your case, your insurance company might send a notice or letter claiming they have a right to a portion of your settlement. This claim or lien represents the amount they paid for your medical bills related to the injury. California law allows health insurance companies to pursue these claims, but it also has limits to protect you.
Let’s say you filed a personal injury claim and settled your case from a negligent party for $50,000. Your health insurance covered $10,000 of your medical bills during your recovery. They may file a lien requesting repayment of that $10,000 from your settlement. However, depending on California’s laws, your attorney might be able to negotiate that amount down.
How Much Can My Health Insurance Take from My Settlement?
Health insurance companies don’t always get the full repayment they ask for. Here’s how the process works:
- Lien Calculation: The insurer calculates what they believe they are owed based on the amount they paid for your care.
- Attorney Negotiation: A personal injury attorney can negotiate this amount, often reducing it to ensure you keep more of your settlement.
- Deductions and Fees: Attorney fees and other costs may be deducted, which can reduce the amount your insurer claims.
California’s “Made Whole” Rule
In some cases, California’s “made whole” rule can sometimes work in your favor. This rule says that, if your settlement doesn’t fully cover your damages, your insurer may not be entitled to full reimbursement. This rule can be especially helpful if your settlement is small.
How a Personal Injury Lawyer Can Help Maximize Your Settlement During Subrogation
Having an attorney on your side is essential for protecting your settlement. Here’s how a personal injury lawyer can help you through subrogation:
- Handling Lien Claims: We handle communication with your insurance company and challenge excessive claims on your settlement.
- Reducing Health Insurance Claims: Attorneys can negotiate directly with your insurance company to reduce their claim and save you money.
- Maximizing Your Settlement: Our goal is to keep as much of your settlement as possible in your pocket, not in the hands of your insurance company.
Steps You Can Take to Protect Your Settlement from Insurance
There are steps you can take to protect your settlement:
- Document Everything: Keep all medical bills, letters from your insurance carrier, and records of any payments. Providing documentation enables your attorney to build a stronger case for you.
- Consult Your Lawyer Before Talking to Insurance: If your health insurance contacts you about a lien, refer them to your attorney. This keeps things simple and ensures that you don’t accidentally give up any rights.
- Act Early: Inform your attorney about any subrogation claims early in the process. The sooner we know, the better we can protect you.
Attorneys at El Dabe Ritter Trial Lawyers Can Help Protect Your Settlement
Yes, your health insurance company may have a right to part of your settlement. However, a skilled personal injury lawyer in California can help you protect as much of your settlement as possible. At El Dabe Ritter law firm, we handle subrogation claims, negotiate with insurance companies, and maximize your recovery.
If you’ve been injured and have questions about your settlement, contact us today for a free consultation. We’ll discuss the details of your case, explain your options, and get you the most out of your settlement.
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