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Can a health care insurer be repaid from a personal injury settlement?

Can a health care insurer be repaid from a personal injury settlement?

Once you receive your personal injury settlement, you may assume that the matter is over. However, you may soon realize that the insurance company is asking to be repaid. The question is, can a health care insurer be repaid after the settlement? The answer to this question is yes. The insurance company and the healthcare provider may place a lien on the settlement amount you receive. A lien refers to an interest from a third party against financial damages or compensation awarded to you in a personal injury settlement.

It is surprising to discover that third parties such as your insurance, your healthcare provider or even the government can make a claim on the settlement you receive. As a victim of a personal injury accident, you are obligated by law to pay back the parties who paid for the medical expenses. This is referred to as a medical lien. It is a payment demand from the proceeds you have received in the settlement.

When can a lien arise?

In most cases, your insurance or a health care provider places a lien on your settlement amount if you do not have sufficient insurance coverage. This would mean that your minimum coverage is way below what is considered as sufficient to cover for injuries sustained in an accident. Many drivers opt for the minimum coverage in the hope that they are never involved in a serious injury. However, life is unpredictable, and wishing for the best does not stop the bad things from happening. The best way to safeguard yourself is to get sufficient personal injury protection (PIP) insurance. When you suffer injuries and exhaust your PIP benefits, the healthcare provider bills your health insurance provider. Once you collect your compensation, the health insurance company will bill you to cover their costs. It is important to note that if you do not recover any damages after your injury, the insurance company will not have a lien on you. This means that you do not owe them anything apart from what you are expected to pay in your health insurance contract.

Why do I need to reimburse my health insurance provider?

If you receive a settlement after your injuries and your health insurance paid for your medical bills, then you should refund the money. This is ideally because failure to repay the insurance provider means that you would have benefited twice. This goes against the principle of indemnity. Under this principle, the insured is supposed to be compensated back to their original financial position before the accident. The compensation is not meant to reward or profit you.

By law, you are obligated to pay back your insurance for the medical expenses. Failure to honor these payments can result in a lawsuit against you. The insurance company can also collect your property or assets to cover the expenses.

Can a lien be negotiated?

Recovering from your injuries can take time. It, therefore, becomes strenuous dealing with your injuries and engaging in legal battles against lien holders. In some cases, it is possible to have more than one lien holder making payment demands. In such an instance, it is wise for you to engage the services of a personal injury lawyer. These lawyers have vast experience in handling liens. Without their help, the money you receive can all be drained from paying insurers, Medicare or Medicaid. A lawyer will negotiate for a flexible repayment plan. He will also ensure that the liens are fair. The lawyer will also work to finalize the liens to avoid further complications in the future.

If you consult with a personal injury lawyer right from the onset, the liens will not catch you by surprise. You will be prepared to make the necessary payments to the parties you owe. Prior knowledge also helps you to plan your finances wisely. This way, you are not caught up in legal battles after you settle your injury case.