House Bill Provision May Help Insurers Recover Medical Costs

Wall Street Journal
Thursday, June 8, 2006

As congressional negotiators try to hammer out a compromise pension bill, some lawmakers and employee advocates say one provision could make it easier for employers and health insurers to gain a share of money that workers win in personal injury suits.
The House and Senate passed different versions of the pension legislation last year, and are negotiating to reconcile them, in a process expected to continue for weeks. The Senate bill doesn't include a similar provision on benefit-plan recoveries.
Most health plans reserve the right to be reimbursed for the cost of medical care. For example, if an employee injured in an auto accident receives medical treatment under his workplace health plan, the insurer could claim proceeds of any legal settlement the employee might receive from the other driver.
But, in many cases, state laws -- and some federal courts -- restrict insurers' ability to recover, especially where the injured employee isn't fully compensated by the lawsuit or settlement.
A provision in the House bill, critics say, could undermine some of those worker protections and broaden insurers' rights to recover expenses. The bill would let insurers step ahead of injured employees when it comes to divvying up a legal settlement or judgment. In a worst-case scenario, the proposed change could leave some accident victims without any of the money they received in court, critics say.
"Very often people don't get enough compensation to begin with," said Joanne Doroshow, executive director of the Center for Justice and Democracy in New York, a consumer group that focuses on legal issues. "It allows [insurers] basically to be first in line and take all the compensation away from the victim."

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