Do I Have to Pay My Health Insurance Back After a Car Accident?

If you were seriously injured in a car accident, received medical treatment, filed a personal injury lawsuit and received a settlement, your health insurer will want reimbursement. Even if covered by Medicare or Medicaid, this repayment is necessary, and it does not matter that you were not the at-fault driver.

In fact, this repayment is even more critical when it concerns government agencies rather than private insurance companies, as the government may impose considerable penalties on attorneys or other parties who do not protect its interests.

The New York City car accident lawyers at Douglas and London know how to reduce this reimbursement for clients, and will work to ensure as much money as possible from a settlement or verdict goes to the injured individual.


Subrogation is the process of repaying your insurer, from your settlement, for your medical bills. As the insured, you don’t have the right to file a claim with the insurance company to receive coverage as per the policy. In effect, that would constitute double payment.

People who don’t hire a personal injury lawyer to pursue a claim are usually unaware of subrogation. They may receive damages from the driver responsible for the crash and not realize that a percentage of this has to repay the insurer.

It is not unusual for these individuals to spend the funds received from the at-fault party’s insurance company, and then receive a letter from their insurer that these monies are owed. That should never happen to those with legal counsel.

The health insurance contract

Private health insurance contracts, such as those with major providers like Blue Cross Blue Shield or Aetna, contain information stating they can seek repayment of medical bills if the patient uses these expenses as a basis for third party recovery. That is exactly what happens in a personal injury lawsuit, where damages may include medical costs relating to the accident.

From the insurer’s standpoint, they wouldn’t have had to pay these bills– if the at-fault driver hadn’t behaved negligently– so reimbursement is appropriate. That other party’s insurance company is paying for what their client did. Keep in mind that if there is no recovery from a third party, you do not have to reimburse your health insurer.

Subrogation letters or liens

Your lawyer will receive a subrogation letter or lien from your health insurance company, which outlines the payments in which the insurer claims an interest. Your attorney should know the amount the insurer is claiming throughout their handling of the case. When the case is resolved, the lawyer can then negotiate a reduction of the subrogation total.

For example, if you went to the emergency room after the accident and were billed $5,000, your insurer is not going to pay the hospital the entirety of that bill. Perhaps the total reimbursement by the insurer to the hospital is $2,000. However, when medical expenses are presented in court, it is for the entire $5,000, not the $2,000 paid by the insurer. The insurance company will receive $2,000 in reimbursement after the settlement or verdict, and the other $3,000 remains part of the client’s settlement.

Contact Douglas and London today

The complexity of subrogation is just one of many reasons you need experienced legal counsel to represent you. Our dedicated New York City personal injury lawyers have recovered millions in verdicts and settlements for clients. Most case are settled, but we will head to trial when needed. There is never a fee unless we win. Contact us 24/7 to arrange a free consultation or contact us online.