When you have been injured in an accident, it’s common to be concerned over how your medical bills will be paid and what will happen once a settlement finally arrives.
Many people are surprised to learn that health insurance can directly affect your injury settlement, including just how much you ultimately take home.
While using your health insurance is normally the best means of receiving needed care quickly, the insurance company may later seek reimbursement, thereby reducing net settlement unless the proper steps are taken. What follows in this article is what you need to know about how health insurance interacts with personal injury claims in Idaho.
How Health Insurance Works After an Accident
Health insurance almost always kicks in first, even if someone else caused your injuries. That’s because your health insurer has a contractual obligation to pay for covered treatment, while the at-fault party’s liability insurer will not pay anything until the claim is resolved.
Using your health insurance usually benefits you because:
- You receive immediate medical care.
- Your insurer pays only discounted, negotiated rates, not the full retail charges.
- You avoid medical debt while waiting for settlement negotiations.
Importantly, Idaho follows what is known as the collateral source rule. This means that just because your health insurance paid part of your medical bills, the at-fault party doesn’t get a discount. You may still claim the reasonable value of your medical treatment in your settlement.
Subrogation and Reimbursement: Why It Matters
While health insurance may pay bills early in the process, most insurers have the legal right to be paid back from your settlement. This process is referred to as subrogation.
What is subrogation?
Subrogation allows a health insurance company to recover the money it paid for your accident-related medical care. It applies to:
- Private health insurance.
- Employer-paid ERISA plans.
- Medicare.
- Medicaid.
- Workers’ compensation.
These may assert “liens” or claims for reimbursement that need to be resolved prior to your receipt of your settlement check.
Idaho’s Rules on Subrogation
Idaho recognizes subrogation interests, although the amount of reimbursement does depend on the nature of the health plan.
- Medicare and Medicaid have statutory lien rights and are required to be reimbursed under federal law.
- ERISA health plans are typically self-funded employer plans that have strong reimbursement rights that preempt state laws.
- Private insurance may be subject to Idaho’s “made whole doctrine.” This means that, as a general rule, an insurer cannot recover any compensation until the injured party has been compensated in full. This doctrine may not apply, however, if a contract or ERISA plan explicitly excludes its application.
Why does this matter? Insurers are often reimbursed from your settlement, thereby reducing your net recovery unless an experienced attorney negotiates the claim.
Negotiating Insurance and Medical Liens
The good news is that subrogation claims are not always set in stone. In many cases, an attorney can negotiate lower reimbursement amounts, especially when:
- The settlement is small-scale.
- Fault is denied.
- Medical bills are high in comparison to the insurance coverage which is available.
Hospital Liens in Idaho
Idaho hospitals may file liens under Idaho Code § 45-701 for accident-related treatment. However:
- Health insurance payments typically prevent hospitals from collecting the full billed charges.
- Sometimes, hospitals bypass insurance if they believe that a settlement is coming.
- Improper or inflated liens may be challenged and reduced.
Negotiating liens is an important part of maximizing your final recovery.
How Health Insurance Can Actually Help Your Claim
Although issues around reimbursement can be frustrating, frequently using your health insurance actually helps your case:
- You get the treatment you need immediately.
- Insurers pay discounted rates, thereby reducing your overall financial exposure.
- Under the collateral source rule, you may still recover the reasonable value of medical care – potentially increasing your settlement.
Often times, using your health insurance will result in a better net outcome rather than waiting for the liability insurer to pay.
Talk to an Attorney Before Settling
Health insurance, including hospital liens and subrogation laws, is complex, especially when federal law may apply, such as Medicare or ERISA. Failure to address these issues at the time of settlement may result in unexpected bills or even collection actions months later.
If you have been injured, Bendell Law Firm PLLC can help you through the process, protect your settlement, and negotiate medical liens on your behalf. Contact us today for experienced counsel.