“Subrogation.” Wikipedia has a full definition: “circumstances in which an insurance company tries to recoup expenses for a claim it paid out when another party should have been responsible for paying at least a portion of that claim.”
Here’s my definition: when your health insurer (or auto insurer, or Medicare, or other insurer) steals your money.
Let’s say a Bad Driver rear ends you, totals your car, breaks your leg, and gives you whiplash. Your health insurance pays $50,000 in medical bills. Then you settle the case for $120,000. Your lawyer takes one-third, leaving you with $80,000. Then your health insurance uses Subrogation to take back the $50,000 they paid for your medical bills. Now you’re left with $30,000.
You paid your health insurance premiums for years. What did you get for it? Basically, you got a loan. Your health insurance paid your medical bills, and then you paid them back.
You’re actually worse off than if you didn’t have health insurance. If you didn’t have health insurance, you still would have gotten the $120,000, paid your lawyer, paid your medical bills, and ended up with the same $30,000. But at least you wouldn’t have had to pay your health insurance premiums for all that time. You got nothing for those premiums.
In Washington State, and in California, if you’re not “made whole” by your settlement, then you don’t have to pay off the insurer. There’s no subrogation until after an accident victim has been fully compensated. Oregon doesn’t have that rule. In Oregon, the health insurer can take your premiums every month for decades, then take all your money from a settlement. They have the right to leave you without a penny if that’s what their subrogation “rights” allow them to do.
They don’t allow it in Washington or in California. It enriches insurance companies by taking money from injury victims who desperately need it.
It’s shameful. It’s a scam. It’s unjust.
But in Oregon, it’s the law.