Do medical bills come out of my settlement?
Yes. In most cases, if you are in an accident, you will require medical treatment for your injuries immediately — and well before you receive a settlement or award from the responsible party. The entity that pays for your medical treatment will typically be entitled to recover their expenses in a process known as subrogation.
Subrogation is a legal term that means that your insurance company can recover the money that it paid to you for your injury (by way of medical expenses). The insurance company will recover this money from the compensatory damages part of your settlement.
In California, if the insurance company can prove that it has the right to subrogation, then it can seek reimbursement from you. For example, if you were in a car accident and were injured as a result, you will likely seek medical treatment. The expenses for these treatments may be billed to your private health insurance company, Medi-Cal, your own car insurance company (through Med-Pay), workers’ compensation, or an uninsured motorist coverage policy. These companies can seek to recover the money that they spent on your medical care if another person or entity was responsible for your injuries. If you receive a settlement for $100,000 and had $25,000 in medical bills, you can expect that $25,000 of your settlement will go to reimbursing these companies.
There are some limits on the insurance company’s right to subrogation under California law. These rules are designed to prevent you from paying out your entire settlement in reimbursement to insurance companies. An experienced California personal injury attorney can walk you through the California laws that govern subrogation based on the facts of your case.