Subrogation (in an injury claim) is where your group health coverage can recover the money they paid out for your medical care caused by the actions of someone else (the other driver in a car wreck). Sounds fair doesn’t it. Why should your insurance have to pay for the bills caused by the person that hit you. Let’s look at that.
You have paid premiums for that coverage to provide you health care when you need it regardless of how you were injured or became ill. You are now in a wreck and need medical attention. You go to your doctor, one referred by the hospital or by a friend. When you go to your appointment (or when you call in) they ask you what happened and you tell them you were in a car wreck. At this point there are doctors our there who will tell you they don’t treat car wreck injuries. If you hurt your back lifting something no problem, but a injured back from a car wreck, sorry no. This despite the fact that you have group coverage to pay the bills. (This will be the subject of another blog) You get a doctor who agrees to see you and they take down your insurance information. Let’s call it Metua. You pay your co-pay and they send the bills to Metua. Metua pays at a “contracted” rate which means the doctor gets significantly less than their normal rate. You get better and are ready to try and settle your case. You have $9,000.00 in medical bills and $1,500.00 in lost wages so you sent the insurance company of the person that hit you a letter saying I am ready to settle give me a call. They send you an offer of $3,500.00. What??? You have $10,500.00 in medical bills and lost wages not counting all the stuff you missed out on and pain because of the wreck. You call up the adjuster and ask how they came up with that crazy number. They tell you. Metua send them a subrogation notice which set out all of your medical care and bills for the wreck, but because of their contract the actual amount they paid was only $1,500.00 of the $9,000.00 so they offered you that plus a $1,000.00 for the lost wages (they thought you should have gone back sooner) and the rest was for pain and suffering. They even offer to send you the information that Metua sent them. You get it and it shows your itemized treatment with the billing from the date of the wreck. Not just the amounts, but who the doctors were and the treatment. Your personal medical information was just handed over to a person who represents a person who hit you in a wreck. You call Metua and they explain they have a right under your policy to subrogation and they were just protecting themselves by letting the other party know how much they were owed. You ask if they will cut down their claim so that you can at least clear something (after all your co-pays). They say no our policy allows us to get every penny back even if you have an attorney (not necessarily true).
So the upshot of this is your health care company provides personal medical information to someone other than you. They paid your doctor significantly less than their normal rate. They undermined your case by providing information to the other side which they were not entitled to. Essentially you have paid premiums for all those years so that the person who hits you gets the benefit. In Texas our legislature approved this with the “paid v. incurred” argument that only the amount actually paid (the reduced rate) should have to be paid by the other party. So if a drunk hits you, he gets the benefit of all those years of premiums you paid for health insurance. Is that right? What do you think about your health insurance giving out your private information to an opposing party? The information they provided could include information not related to the wreck at all (prescriptions, other treatments, etc.) but just happens to be after the date of the wreck.