What is Subrogation in Health Insurance?

• March 28, 2025
• The Stoddard Firm
• Personal Injury

If you’ve ever had medical bills covered by your health insurance after an accident, you might be surprised to learn that your insurer can ask for that money back. This is known as subrogation, and it often comes up when you receive a settlement from the at-fault party. Knowing how it works can help you plan ahead and avoid unexpected financial surprises.

At The Stoddard Firm, we guide Atlanta residents to be aware of what is subrogation in health insurance.

Understanding Subrogation in Health Insurance

What Does Subrogation Mean in Health Insurance?

Subrogation in health insurance means that if someone else was responsible for your injuries, your health insurance company has the right to be paid back for the medical bills they covered.

For example, if another driver causes a car accident and your health insurance pays for your hospital stay, your insurer can later request reimbursement from the at-fault driver’s insurance once you receive a settlement.

Why Health Insurance Companies Use Subrogation

Insurance companies use subrogation to recover costs and keep overall premiums lower for everyone. Without it, they’d be paying out medical expenses even when someone else was clearly at fault.

Subrogation also helps:

• Prevent duplicate payments for medical bills
• Make sure that the responsible party covers the costs of their negligence
• Keep health insurance costs down by recovering expenses

How Subrogation Protects Health Insurers

When an insurance company pays your medical bills, they assume temporary responsibility for your costs. However, subrogation allows the companies to transfer this responsibility back to the liable party. This ensures that the insurer doesn’t bear undue financial burdens for injuries caused by someone else’s negligence.

How Subrogation Works in Health Insurance Claims

When Does Subrogation Apply in Health Insurance?

Subrogation applies when your health insurance covers medical costs after an accident that wasn’t your fault. Your insurer then has the right to seek repayment if you receive a settlement or court award.

The subrogation typically applies in the following ways:

• Car accidents
• Slip and fall incidents
• Workplace injuries

Example of Subrogation in Action

Imagine you are injured in a car accident caused by another driver. Your health insurance covers $20,000 in medical expenses while you recover. Later, you file a personal injury claim and receive a $50,000 settlement from the at-fault driver’s insurer. Through subrogation, your health insurance company requests repayment of the $20,000 they covered, as long as they are not paying for another party’s liability. This principle is reinforced by Georgia law, which states that an insurer may only seek subrogation when the insured has been “fully and completely compensated” for their losses.

Subrogation and Personal Injury Cases

Health Insurance and Your Injury Settlement

When you receive a settlement or court award for a personal injury case, it’s natural to assume that the money is yours to cover lost wages, medical costs, pain and suffering, and other damages. However, if your health insurance company covered your medical bills after the accident, they may have a legal right to claim a portion of your settlement through subrogation.

This means that before you see the full payout, your insurer could step in to recover the expenses they paid on your behalf. The amount they can claim depends on several factors, including the terms of your health insurance policy, state laws, and whether your attorney negotiates a reduction in the repayment amount.

In Georgia, subrogation rights in workers’ compensation cases are governed by OCGA § 34-9-11.1(b), which allows for a subrogation lien on settlement monies, but only if the injured party has been fully compensated.

The Process of Recovering Medical Expenses After a Settlement

Once your health insurance covers your medical bills, they keep track of your claim. If you pursue a personal injury settlement, they’ll assert their subrogation rights and request reimbursement.

However, this isn’t always set in stone. Your attorney can negotiate with your insurer to reduce their claim, ensuring you keep a fair share of your settlement. Legal doctrines like the “Made Whole Doctrine“ or the “Common Fund Doctrine“ can sometimes limit how much your insurer can recover. Managing this process carefully can help protect your financial interests.

Who Pays for Medical Bills in a Personal Injury Case?

In a personal injury case, medical expenses may be covered by:

• Your health insurance policy
• The at-fault party’s insurance provider
• Personal injury protection or MedPay coverage
• Workers’ compensation benefits

Determining who ultimately pays for medical bills in a personal injury case depends on many factors, including the type of insurance coverage available and the liability of the parties involved. If the injured person has health insurance, their insurer may cover initial medical costs but later pursue reimbursement through subrogation.

How Subrogation Affects Your Personal Injury Settlement

Subrogation can significantly impact the amount you ultimately receive from a personal injury settlement. If your health insurance company asserts a subrogation claim, a portion of your settlement will be allocated to reimburse them for the medical expenses they covered. This can reduce the funds available to you for other damages, such as pain and suffering or lost wages.

However, an attorney can help negotiate a reduction in the subrogation claim, making sure you retain as much of your settlement as possible. By carefully looking up the subrogation process, you can protect your financial interests and maximize your final compensation.

What Happens if Subrogation is Not Paid Back?

Here’s what could happen if subrogation isn’t addressed properly:

• Your Insurer Could Take Legal Action – If your insurance company believes they have a right to reimbursement, they might take legal steps to recover the money. This could mean anything from sending formal demands to filing a lawsuit.
• Future Claims Could Be Denied – Some insurers may refuse to pay for future medical treatments if they believe you didn’t uphold your end of the policy’s terms. This can make it harder to get coverage when you need it most.
• It Could Affect Your Finances – In some cases, unpaid subrogation claims might be sent to collections, which could impact your credit score or create additional financial headaches.

How to Handle Subrogation Issues in Health Insurance Claims

Handling subrogation effectively starts with understanding your insurance policy. Reviewing the terms can clarify how much your insurer can claim and whether you have room to negotiate. If your insurance company asserts a claim, working with a lawyer can often lead to a reduced repayment amount—helping you keep more of your settlement.

Why You Need an Experienced Atlanta Personal Injury Lawyer for Subrogation Issues

Following subrogation in health insurance and negotiations can be challenging. At The Stoddard Firm, we help with personal injury cases in Atlanta to protect their settlements and minimize insurer claims. Contact us today for a consultation to guarantee you receive the full compensation you deserve.