Health insurance is a popular topic these days, what with all the efforts to repeal and replace. No matter how you feel about our current health care laws, health coverage is a lifesaver in an accident that escalates to a personal injury claim.

But what happens when you settle a personal injury claim? That insurer that generously paid part of your hospital bills will come back to collect. Here’s what you need to know to protect your settlement.

Can they do that?

Unfortunately, yes. Health insurers are entitled to make a claim against the lawsuit for whatever they paid for your medical care. By law, they can’t make a claim against the defendant or his or her insurance company. They have to make a claim against the plaintiff’s settlement.

Most health insurers have a provision in their policies that says if they pay for accident-related treatment, and the insured has a monetary recovery from a third party, the insurer is entitled to recoup.

What can I do?

Your lawyer works to get the highest settlement amount possible from the defendant’s insurance company. In addition to arguing for the most favorable settlement, your lawyer also needs to negotiate with health insurers to convince them to accept the least amount possible.

Say your health insurance company paid $6,000 in medical bills related to your claim. That insurance company has a claim against the settlement for $6,000.

It’s important to start negotiating with health insurers before the case settles. The reason is that prior to the actual settlement, the lawyer has better leverage to get them to compromise. Some health insurers, however, refuse to negotiate until there is an actual settlement, so those cases are handled a bit differently.

In the case with the $6,000 medical bills, with most health insurance plans, we can reduce that amount to at most $4,000, which includes reasonable attorney’s fees and a share of the costs. With more negotiation, we often reduce it further.

If your health insurer covered all or part of your accident-related medical bills, be prepared to see at least some of that money come from your settlement. Insurance companies are tricky to deal with, so make sure you have an experienced personal injury lawyer advocating on your behalf. You may get to take home a little more of those settlement proceeds.

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