Sometimes we find ourselves representing a client whom we represented in a personal injury claim 10 or 15 years ago. These clients are invariably amazed at the shear number and complexity of additional insurance wrinkles that have sprung up over the intervening years. One of the most irritating recent wrinkles involves health insurance.
For those of us who have paid health insurance premiums for a number of years, we have seen years of double-digit percent increases in our premiums. Thousands of dollars of our income go toward paying a health insurance company for the sole reason that it pay our medical bills. And once a premium dollar is paid, you never get it back. Your premiums are non-refundable.
But the rules just keep getting better for the health insurance companies. If they pay a medical bill on your behalf, as required by the policy you’re paying for, most of them will now leave no stone unturned in a search to get that money paid back out of any injury claim you may have. The end result is that any recovery you’re pursuing against a wrongdoer could be completely gobbled up by your health insurance company – to repay them… for bills… you paid them premiums… to pay in the first place!
And don’t bother asking them for your premiums back – remember? Those are non-refundable.
All of this is head-spinning, wrong, and yet perfectly legal. In fact, the Ohio Supreme Court recently strengthened the insurance companies’ rights even further. Question: If an insurance company collects your hard-earned dollars to provide you insurance, pays your bills as a result, and then gets all of that money back at your expense, is that insurance anymore?
It gets worse. We all know that different folks are insured at different premium levels, depending on factors such as age, health, number of dependents, etc. All of these factors are considered in the underwriting process that ultimately determines how much premium you have to pay for your policy. Insurance executives have testified under oath that the possibility of getting their money back in an injury claim is not factored into underwriting. If it were, it would certainly reduce premium to some degree. Because any money recovered as part of a victims legal action is not considered during underwriting; it represents a complete windfall to the insurance companies. They charge a full premium based on normal risk factors. When a claim is made, if they’re “fortunate” enough to identify an auto insurance policy to get money from instead for medical bills that they are contracted to pay, it’s pure windfall profit.
While this is all a big boost to the bottom line of the insurance company, it comes at your expense. As an example, if there were $50,000 available to pay you for your injury claim but your health insurance company paid $60,000 for your medical bills, you are literally looking at a situation in which, on paper, you as the injured person get nothing. Now at this point, most of the health insurance companies will offer to reduce their lien and “only” recover one-third to one-half of the $50,000 available. In so doing, they portray themselves as good Samaritans taking a hit on your behalf. (Remember, this is all pure profit to them).
Most clients we talk to about this get pretty worked up. Well, so do we. The ultimate irony is that this issue hurts the most seriously injured the worst. Those whose lives have been forever altered by permanent injuries, and who have experienced hundreds of thousands of dollars in medical treatments, are the same ones who face the prospect of losing hundreds of thousands of dollars of their claim only to be turned over to an insurance company to boost its bottom line.
Fortunately, the law requires insurance companies to take certain affirmative steps to secure these rights, and we have had success demonstrating that the insurance companies have not done everything they were required to do. This boils down to half gum-shoe detective work and half legal scholarship. We have to make sure we have the correct policy and that the insurance company has actually written into the policy necessary language to even accomplish this.
Especially on permanent injury or catastrophic loss cases, this issue can be as important as all other issues combined. We have had cases where liability was clear, injuries were permanent, insurance coverage was limited to $100,000, and the at-fault insurance carrier promptly offered those limits… to the health insurance company! The fight then becomes doing everything we can to put every dollar possible in our client’s pocket.
This fight is not for the faint of heart, and it is aggravating for us to be the bearer of bad news when we so strongly disagree with this policy. However, we have found success, and we find it personally fulfilling, to battle back these liens in defense of our client.