How Does Health Insurance Come Into Play?

If you or a loved one has been injured in a car accident, health insurance provides the primary source of payment for accident related medical expenses. There may be an exception to this rule if there is "medical payments" coverage on one of the automobile insurance policies providing coverage for the accident. This is usually known as "med-pay" coverage. If there is med-pay coverage, it is primary and pays first for things like ambulance bills and emergency room bills. Once this coverage is exhausted (many times there is only $5,000.00 in med pay coverage), health insurance steps in and picks up the tab for accident related medical care.

With respect to health insurance coverage, most, if not all, health insurance plans provide that the plan must be paid back a portion of the medical bills paid if money is recovered from a third party. This is known as insurance "subrogation."

Importantly, the health insurance plan only seeks repayment for the reduced amount of the bills it pays while the at-fault party is generally responsible for the full amount of the medical bill. To illustrate how this works, consider this example: assume someone is hurt in an accident and incurs a $10,000.00 ER bill. Because of contracts between the health provider and the health insurance company, the health insurance company only pays $3,000.00 for the bill. Because of Colorado's Collateral Source rule, the at-fault party generally is responsible for the full $10,000.00 bill while the injured party only needs to pay back $3,000.00. Colorado law generally provides that between the innocent victim and the person who caused the accident, the victim should get any windfall based on his or her prudence in obtaining health insurance.

Further clouding this issue, how much of the $3,000.00 paid by the health insurance company must be paid back depends on several factors. This issue must be addressed in every case and is extremely important because it directly effects how much money the injured party ultimately ends up with.

If you or a loved one has been injured in an accident, contract us today. The lawyers at Fuicelli & Lee, P.C. are experts in insurance subrogation and insurance related issues.