Accidents happen all the time that are often another party’s fault, and you have the right to go to court to sue for your medical expenses, pain and suffering and lost wages. Even if you do win, what you end up with at the end of the day could be a good deal less than what you think: In some cases, your health care plan could try to claim part or all of your settlement for what it spent on your health care.
This is legal and it happens quite frequently, but the good news for consumers is that a recent US Supreme Court decision gives you the opportunity to push back.
This Supreme Court case involved a drunk driver running a stop sign in 2008 and hitting Robert Montanile, causing serious injuries. He had to have lumbar spinal fusion surgery and other medical treatments that totaled $121,000, which his employer health plan covered. Monantile hired a personal injury attorney to sue the drunk driver and he won a $500,000 settlement. He paid his lawyer $263,000 in fees and expenses, and he was left with approximately $236,000.
His health plan, however, claimed it was entitled to be reimbursed for his medical care. Many health insurance contracts allow the plan to reimburse itself if the member gets a personal injury settlement or jury award.
Note that Obamacare plans do not get reimbursement from tort claims, and many other health insurance plans also do not get reimbursement
Montanile hired another attorney to negotiate with his health care plan, but they could not reach a settlement. The attorney told the trustees of the plan if they did not respond in two weeks, he would release the remaining settlement money to his client. That is what he did.
Then the health care plan sued the accident victim for the money, but he had already spent most of it to pay his second attorney and for his own medical and personal needs. Lower courts ruled that although he had spent the funds, the health care plan could reimburse itself from the man’s other property.
The Supreme Court, however, ruled 8-1 that the plan only could take specific funds that he had gotten in the settlement that could be traced to it. The plan at this point may be able to recover some of the funds, if it is able to trace assets to the settlement he won.
Regardless of how it turns out, this case could have a significant positive effect for consumers. The USSC made it clear that health plans may not seize a person’s general assets to pay themselves back for medical costs the plan incurred. This ruling also could boost the injured party’s chances of retaining a larger amount of their settlement or jury award by encouraging health plans to negotiate early on.
If you are involved in a personal injury case, be sure to discuss this matter with your personal injury attorney to ensure that you are able to keep the maximum amount of your settlement or verdict amount.
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