Q Why do I have to pay back my health insurance company if I recovery a settlement in a personal injury case?
A truck or car crash occurs in Middletown, Connecticut. The plaintiff suffers injuries and goes to the doctor. The plaintiff incurs medical bills from the Middlesex Hospital. The plaintiff’s medical bills are then paid for by the plaintiff’s health insurance company. A collateral source is a third party (other than the plaintiff or defendant) that pays the plaintiff’s medical bills. When the plaintiff’s medical bills are paid for by the plaintiff’s health insurance, then the plaintiff’s health insurance is considered a collateral source. But shouldn’t the bills be paid by the person who caused the truck or car crash instead of the plaintiff’s health insurance? How does that work?
The concept is this: The person who caused the crash should incur the cost of the medical bills. But, the plaintiff should not recover damages for their medical bills twice. Or stated another way, the plaintiff should not be allowed to keep the damages recovered from the defendant for medical bills if the plaintiff had their medical bills paid for by a collateral source. If the plaintiff is paid damages for those medical bills from the defendant and if the plaintiff had those bills paid for by the plaintiff’s health insurance, then the plaintiff has, in effect, recovered twice: (1) once from the defendant and (2) a second time from their health insurance company when the insurer paid the medical bills. The law does not permit this to occur and, as a result, there are a series of rules known as “collateral source rules” that provide for payment from the defendant for the medical bills and then a payback to the plaintiff’s health insurance company to reimburse them for the medical bills the insurer paid. That way, the loss or payment is borne by the defendant and not the plaintiff’s health insurance company.
Also, in instances when the plaintiff is not required to pay back their health insurance company the defendant gets a credit that reduces the economic damages by the amount of the collateral source. There are several sub-rules that apply such as a reduction of the credit by the amount of the insurance premiums that the plaintiff has paid in order to obtain their health insurance. But, the concept is that the defendant should bear the cost of the medical bills and that the plaintiff should not recover twice. The health insurance company should be paid back and if they are not paid back, then the defendant gets a credit off the economic damages equal to the amount of the medical bills paid that don’t get paid back.
If you have been in a car crash in Middletown Connecticut you might have questions about the collateral source rule, and how it will affect your settlement proceeds. Contact The Bartinik Law Firm, PC., 100 Fort Hill Road, Groton, Connecticut at 860-445-8521 or toll free at 888-717-4211.