Health Insurance Tort Blues

Our clients are often shocked to learn that after a serious injury resulting in major medical expenses, their own health insurance company wants to be repaid out of any personal injury case settlement or judgment. Even worse, the health insurer typically asserts that it will not cover future medical bills relating to those same injuries until the injured person has exhausted all of the personal injury funds by paying those future medical bills directly.

Pen and Insurance Contract image
To best serve your clients, make sure they have adequate uninsured and underinsured motorist coverage.

People naturally ask: "What have we been paying all those premiums for, for all of those years?" It's a good question. A quarter century ago, the health insurance industry was still transitioning from its historical role of paying for medical care in exchange for the receipt of premiums. The industry's evolving role became more of a loan service, in effect extending a loan to its insureds, to be repaid out of any personal injury recovery (or "forgiven" if there were no recovery).

Later, the health insurance industry took even more aggressive positions, by claiming the right to bring its own actions against tortfeasors and by claiming the right to cut off certain future health care benefits until all the tort recovery has been spent solely on medical bills. The industry's view is that its economic interests are more important than the injured person's interests in recovering lost wages and in receiving compensation for human losses such as disability or disfigurement.

The extent to which these various health insurance provisions can be enforced depends in part on whether they are governed by state or federal law, and the nature of the underlying tort case. (Government health insurance programs, such as through Medicare, Medicaid, or the Oregon Health Plan, have entirely different sets of rules).

For people who receive their health insurance as a benefit of a private sector job, federal ERISA law generally applies. Courts have been considering how and to what extent these insurance provisions can be enforced under ERISA, and we have no doubt not heard the last word on this subject.

For people who receive their health insurance as a benefit of a public sector job, or have purchased an individual policy, Oregon state law should govern. Under Oregon law, certain statutory provisions apply if the injury was sustained in a motor vehicle collision. There, the health insurer must pay its pro rata share of attorney fees and litigation costs. ORS 742.536 and 742.538. However, these statutes do not expressly apply to personal injuries sustained in ways other than motor vehicle accidents, and do not explicitly address issues such as who is to pay for future medical expenses.

What Can Attorneys Do to Inform Their Clients About These Issues?

Some people might be able to afford disability insurance. That doesn't solve all of the problems, but helps with the health insurer's claims that its financial interests trump the injured person's income losses.
Because individuals have no real opportunity to negotiate the terms of their health insurance contracts, they are not likely able to avoid the kinds of provisions mentioned above. But people can try to avoid signing post-incident "trust agreements" and similar documents from health insurers that purport to give the insurer greater rights than the policy itself provides.
If the health insurance contract is subject to ERISA, people can be referred to an attorney who keeps up with the intricacies and developments in that area.
Especially if the client has no health insurance, they might consider buying higher levels of no-fault Personal Injury Protection (PIP) coverage under their auto policies.
And people can always try to negotiate with their health insurers, especially on the issue of payment for medical bills incurred after the settlement or judgment; most good personal injury attorneys offer this as part of their service.

Tort Tip Archives

Get the Lead Out Test Kits
Health Insurance Tort Blues
Nursing Home and Assisted Living Rights
When Government Does Wrong
Uninsured Motorist Update
Holiday Accidents
Insurance Legislation
Premises Liability
Inadequate Liability Insurance
Measure Seeks to Limit Contingent Fees
Dealing with Clients Outside Your Scope of Practice

The Corson & Johnson Law Firm serves clients throughout Oregon, including Eugene, Portland, Brownsville, Springfield, Hood River, Brookings, Corvallis, Salem, Redmond, Roseburg, Medford, Klamath Falls, Myrtle Creek, Bend, Albany, Creswell, Ashland, Central Point, Grants Pass, Junction City, Florence, Tigard, Cottage Grove, Coos Bay, North Bend, Newport, Oregon City, Hillsboro, Gresham, Beaverton.

Benton County • Clackamas County • Coos County • Crook County • Deschutes County • Douglas County • Jackson County • Jefferson County • Josephine County • Klamath County • Lane County • Lincoln County • Linn County • Marion County • Multnomah County • Polk County • Tillamook County • Washington County

The Corson & Johnson Law Firm does not offer any guarantee of case results. Past success in litigation does not guarantee success in any new or future civil action. Our web site describes some of the cases that Don Corson, Lara Johnson, or The Corson & Johnson Law Firm has worked on in the past. Our description of those cases is summary in nature. The results obtained in each of the cases depended on the particular facts of each case. The results of other cases will differ based on the different facts involved.

FULL DISCLAIMER