Subrogation - Health Insurers Screw Policyholders.

[AllenChicago]

April 7, 2015

The President (B.H. Obama) and his Administration accuse health insurance companies of being evil, greedy, and callous. When it comes to subrogation against policyholders, health insurers are proving him/them correct... And it's exploding under his watch. Go figure.

Excerpt: "Although a Los Angeles Superior Court jury awarded Stow $18 million from the Dodgers and the fans who severely beat him last year, he has yet to receive any money.

It’s all because Stow’s health insurer is entitled to a huge slice of the settlement, even before Stow is paid. A growing body of federal law, including a recent U.S. Supreme Court case, gives insurers power to recoup medical costs caused by a third party—in the face of state laws that specifically prohibit it.

The concept is known as subrogation. In recent years, subrogation has mushroomed into a multibillion-dollar source of offsetting costs for private health insurers as well as Medicare and Medicaid. Medicare reaped nearly $2.5 billion last year, aided by a 2007 law that requires the federal insurer for the elderly to be notified of any legal settlements paid to its beneficiaries so it can subrogate the funds."

Full Story: How an Insurer Is Taking Money From the Fan Beaten at Dodger Stadium - Bloomberg Business

ac

 

[somarco]

In recent years, subrogation has mushroomed into a multibillion-dollar source of offsetting costs for private health insurers as well as Medicare and Medicaid. Medicare reaped nearly $2.5 billion last year, aided by a 2007 law that requires the federal insurer for the elderly to be notified of any legal settlements paid to its beneficiaries so it can subrogate the funds."

Does that also mean Medicare and Medicaid are evil, greedy and callous?

 

[djs]

P&C insurance welcomes Health to subrogation. This is not new, just 'newer' to the health side of the business.

Dan

 

[somarco]

This is not new, just 'newer' to the health side of the business.

How new?

I recall working as a group rep in the 70's and getting involved in subrogation claims against WC. We probably had some with auto insurance as well but the WC situations were a real PITA.

 

[sshafran]

April 7, 2015 The President (B.H. Obama) and his Administration accuse health insurance companies of being evil, greedy, and callous. When it comes to subrogation against policyholders, health insurers are proving him/them correct... And it's exploding under his watch. Go figure. Excerpt: "Although a Los Angeles Superior Court jury awarded Stow $18 million from the Dodgers and the fans who severely beat him last year, he has yet to receive any money. It's all because Stow's health insurer is entitled to a huge slice of the settlement, even before Stow is paid. A growing body of federal law, including a recent U.S. Supreme Court case, gives insurers power to recoup medical costs caused by a third party--in the face of state laws that specifically prohibit it. The concept is known as subrogation. In recent years, subrogation has mushroomed into a multibillion-dollar source of offsetting costs for private health insurers as well as Medicare and Medicaid. Medicare reaped nearly $2.5 billion last year, aided by a 2007 law that requires the federal insurer for the elderly to be notified of any legal settlements paid to its beneficiaries so it can subrogate the funds." Full Story: How an Insurer Is Taking Money From the Fan Beaten at Dodger Stadium - Bloomberg Business ac

Yet the ins co suffered a big financial loss - why is it evil for them to recoup the losses?

Sounds like some other party is the real one guilty of "greed."

Sent from my iPad using InsForums

 

[djs]

How new?

I recall working as a group rep in the 70's and getting involved in subrogation claims against WC. We probably had some with auto insurance as well but the WC situations were a real PITA.

Only new as in more common. It used to be health insurance companies rarely subrogated against auto insurance policies, but now it seems to happen all the time. This is going to raise the auto insurance premium pretty quickly, and somehow, I doubt it will help health insurance premiums.

Now, medicaid has been doing this for forever, so its not new at all. Greedy gov'ment.....

Dan

 

[GreenSky]

I don't understand why this is an issue.

Insurance company pays medical bills. Policyholder is reimbursed for the medical bills paid by insurance company. Isn't the insurance company entitled to be reimbursed for what they paid?

Rick

 

[somarco]

I don't understand why this is an issue.

It's only an issue if it is a political talking point, or the person making the comment is completely clueless.

Without subrogation I suppose one could argue the insured profited by unjust enrichment.

$50,000 claim.

Health insurance (Medicare, Medicaid) paid $40,000.

Auto carrier (or workers comp, or ....... ) paid $50,000 to injured party. Injured party now has $0 OOP and $40k in the bank due to claim being paid 2x.

Health insurance carrier has every right to be made whole. Most insurance, including health insurance, operates under the philosophy of indemnification. To indemnify one is to make them whole again.

In this case the injured party profited when they were only entitled to be indemnified for their loss.

Insurance 101

 

[AllenChicago]

The entire reason for me starting this thread is because I was appalled that an injured sports fan was awarded millions of dollars in a lawsuit, but didn't have access to the money/award because the greedy, callous health insurance company that paid for his injury/therapy treatment, is fighting for a couple million $$$ of his settlement.

Since the insured paid his monthly premium, all the health insurer is entitled to is the deductible/OOP. To want more is just plain greedy and and morally wrong, IMO.
ac

 

[somarco]

Probably very little of the award goes to pay past medical expenses. Some will be set aside for future expenses. The health insurance carrier is not entitled to any monies not directly tied to covered medical expenses.