Do I Have to Pay Back My Health Insurance After My Personal Injury Settlement?

If you were injured in an accident caused by someone else’s negligence, you will likely need immediate and ongoing medical care — you cannot wait to obtain medical treatment until your personal injury case is over and you’ve obtained compensation. However, you may be wondering how you will be able to afford the medical bills you’re accumulating. One option to ensure your medical costs are covered is using your own coverage and paying back your health insurance after a settlement or verdict is reached.

How are Medical Bills Paid in a Personal Injury Case?

By filing a personal injury action, you may be entitled to compensation for the harm the at-fault party caused you to suffer. If you can establish negligence, you will be compensated at the conclusion of your case — either by settlement or jury verdict — and monetary recovery will be provided by the defendant’s insurance company. While you will not be compensated until your case has concluded, you have several options to pay your medical bills while the lawsuit is pending. These can include the following:

• Paying your medical bills upfront out of your own pocket
• Using your health insurance to cover your medical expenses
• If you were in a motor vehicle accident, utilizing your own Personal Injury Protection (PIP) coverage
• Going on a payment plan to help manage the costs of medical bills
• Paying your medical provider on a medical lien

If you use your health insurance, the amount you will be required to pay back after an accident will depend upon the specific language in your plan. Some plans will only pay up to a certain amount for accident-related medical care.

When you treat on a lien, you will likely be required to sign a lien letter, which gives the medical provider the right to collect the payment owed from your settlement. It’s vital to consult with a knowledgeable personal injury attorney who can advise you regarding the best course of action before signing any agreement.

What is a Medical Lien?

A medical lien in a personal injury case allows your medical provider or insurance company to be paid back after a settlement has been reached. Simply put, if you pay your medical bills on a lien, the provider will be paid from any settlement funds that are recovered in the lawsuit. This can ultimately reduce the amount of compensation you receive at the end of your case. However, it’s important to understand that a lien can make it possible to receive the medical treatment you need with no costs upfront. Not only is getting the medical treatment you need crucial for your health, but also to build a strong claim against the negligent party.

By treating on a lien, you will not end up with the full amount of compensation you were awarded. First, you will be responsible for paying back health insurance after a settlement has been reached — as well as any other lien holders. Suppose the settlement in your case is for $300,000. If you owe $50,000 to lienholders, it would come out of the $300,000 you were awarded in compensation. A skillful personal injury attorney can negotiate a reduction in the lien amount on your behalf.

What is Subrogation?

Although the terms “medical lien” and “subrogation” are often used interchangeably, it’s essential to note the difference. Specifically, subrogation is the process that allows an insurance company to step into your place to pursue a claim against a third party in order to be reimbursed. In other words, your insurance company could seek reimbursement from the at-fault party or their insurance company. You are expected to cooperate with your insurance company during the subrogation process.

If you paid a deductible, your insurance company must include it in its demand for subrogation to the negligent party. In the event you were partly at fault for the accident, you will only be able to recover a portion of your deductible. For instance, if you were found to be 30% at fault for the accident, you would only be able to recover 70% of your deductible.

Questions About Paying Back Your Health Insurance After Your Settlement? Contact an Experienced Washington Personal Injury Attorney

If you were hurt in an accident caused by someone else’s negligence, carelessness, or recklessness, you may be entitled to compensation in a personal injury action. However, paying back your health insurance after a settlement, medical liens, and subrogation can be complex. It’s vital to have a diligent attorney by your side who can negotiate any claims made by your insurance company and help ensure you receive the maximum monetary recovery to which you’re entitled.

With locations in Burien and Bellevue, Herron Law Office, PLLC assists accident victims in Washington recover their rightful compensation for a wide range of personal injury matters. If you’ve been hurt in an accident caused by the negligence of another, we welcome you to contact us for a consultation to discuss your case by calling (425) 600-2580.