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Subrogation – Your Diminishing Personal Injury Settlement

Subrogation occurs when a person or entity steps in to take over the rights and remedies of another.

While this definition may be confusing, consider the following situation: If you have homeowners insurance and your house is robbed, your insurance company will pay out money for your lost items. If those items are later returned or found, then the law of subrogation says that the recovered items would technically belong to your insurance company since they paid you for the items.

The above situation helps in understanding subrogation as it relates to your mesa az personal injury case. If you have health insurance and you are injured, your health insurance company will pay out money for your medical expenses. If you later receive compensation for those injuries through a personal injury settlement, your health insurance company may have a right to a portion of your settlement proceeds up to the amount that they paid out for your medical care and treatment. This is subrogation.

Arizona: An Anti-Subrogation State

Private health insurance in Arizona is not allowed to pursue subrogation rights against your personal injury settlement. While this applies to most health insurance plans, there are a few exceptions to this anti-subrogation rule. Mainly, taxpayer funded or government guaranteed health insurance plans like Medicare, AHCCCS, and select employee benefit plans are not barred from pursuing subrogation rights. As such, Medicare, AHCCCS, and select employee benefit plans can and will pursue subrogation rights meaning they will try to recoup their costs by going after your personal injury settlement.

Often times, the at-fault party’s insurance company will not issue your settlement check until subrogation issues are resolved. Oftentimes they will issue joint checks made payable to the injured party, his or her lawyer AND Medicare or AHCCCS or they will pay a portion of your settlement directly to Medicare or AHCCCS.

Why is Subrogation Important?

Starting January 1, 2014, it is mandated that all American citizens have some form of health insurance. Many of those who currently do not have health insurance will purchase it through either state-based exchanges or through the Medicare expansion, both of which plans are or will be entitled to subrogation rights. Thus, subrogation claims will only become more common.

If you have been injured and your health insurance is provided by Medicare, AHCCCS or an employee benefit plan entitled to subrogation rights, we can help you navigate the subrogation issues and make sure you recover as much as possible. We can get subrogation issues resolved in a timely and effective manner. If you have been involved in an accident, contact our office for a FREE, NO OBLIGATION consultation.


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