Health Plan Subrogation - In the News
Health Plan Subrogation - In the News
By Joni L. Landy, Esq.
In a nutshell, subrogation is the right of a health plan to recover money it paid out for medical care to treat injuries or conditions caused by another party. For example, subrogation may apply when a participant sustains injuries as a result of a slip and fall on a slippery sidewalk, or may apply if a participant is injured by another driver in a car accident. If the participant sues the party that caused his injuries and recovers, the health plan gets paid back from the recovery. Subrogation rights are typical provisions in health plans.
Recently, the Wall Street Journal highlighted how employer plans are becoming more aggressive in pursuing subrogation rights to keep health benefit costs down for the employees. In addition to large claims, plans are also pursuing subrogation on smaller claims. See Vanessa Fuhrmans, Wall Street Journal, Tuesday, Nov. 20, 2007.
Tucker Arensberg handles subrogation for employer health plans.
I seriously doubt that pursuing subrogation rights keeps health insurance premiums down, as it is impossible to determine what percentage of a person's medical expense reimbursement will be subject to subrogation recovery.
What health insurance subrogation does, is prevent an injured party from making a double recovery on their medical expenses.
REPLY BY:
Joni Landy
Hi Mr. Lang. Thank you for your comment.
The subrogation recovery itself, of course, is definitely measurable. Whatever amount is recovered is credited to the health plan itself and factors in for experience purposes. And, the experience drives the premium costs for the participants as a group. The more recoveries, the less the premium for the participants as a whole. And of course, you are right, subrogation does prevent the participant from recovering twice for the medical expenses that have already been paid by the health plan, which is why subrogation is not unfair to the participant.