Personal Injury Video Law Tip
“This is probably one of the most common questions that I get. You do have to pay your health insurance company back. You don’t always have to pay them every dime that they pay back but before your case can be settled, your insurance company does have to agree to either take the amount they paid or an amount lesser.” – Dena Sisk Foman
Additional Information about paying back (reimbursing) your health insurance provider if you receive money in a Florida Accident Case
One thing that confuses people is whether or not they can use their health insurance after an accident. The answer is yes. At our firm we want you to use your health insurance because it typically results in you receiving a larger amount of your total settlement (net amount paid to you after all expenses).
Keep in mind that personal injury protection insurance (PIP) is the primary insurance for car accidents in Florida, which means that you must use the $10,000 in coverage before your health insurance will pay.
There are major benefits for using medical providers on your health plan. For one, they are limited to the contracted rates already negotiated by your insurance company and your provider. When the case is resolved, we settle with the the insurance company rather than your doctor.
Why is this important?
If you go with a provider that does not take your health insurance, the bills are usually much higher. Where health insurance may pay $50 for a procedure the doctor may bill $200 for the same procedure. It is easier to negotiate with your insurance company using the lower $50 amount, rather than the much higher $200 amount.
There are law firms that will instruct you to see doctors that are not on your health plan. The reason for this is that the settlement value (financial payout) is larger when the out of pocket expense are more money. The person you are suing and their insurance company knows whether or not your have health insurance and if you do, they know that the billed amounts are not the actual amount you will pay. They will use this to offer lower settlement amounts. The problem is that sometime the medical bills are so high, that they create a barrier to settlement and the only people that walk away with money in their pocket is the attorney and the doctors. We focus on your bottom line first.
For instance, assume a case settled for $100,000. Your medical treatment was billed at $60,000 but insurance paid $8000 and there are no other medical bills and your litigation costs (cost of filing suit, copies, depositions, etc.) are $2,000.
In scenario one the settlement breakdown would look like this:
$100,000 Total Settlement (amount recovered on your behalf by attorney)
– $40,000 Attorney’s Fees (assuming a 40% contingency fee)
– $ 2,000 Litigation Costs
– $ 8,000 Insurance Lien
$50,000 Net Payout to You
In scenario two let’s look at this same example but without insurance:
$100,000 Total Settlement
– $40,000 Attorney’s fees
– $ 2,000 Litigation Costs
– $22,000 Negotiated Medical Bills (doctor reduced his/her bills by $38,000)
$36,000 Net Payout to You
Personal injury law video number 100017: Do you need to reimburse your health insurance provider in a successful Florida Accident Case?