Hurray! This week New York Governor Patterson signed a new law, which had wound its way through the New York legislature for months, which helps victims of personal injury in New York and New York personal injury lawyers, including Auburn and Syracuse personal injury lawyers like me! The law amends New York’s CPLR 4545 (called “the Collateral Source Rule”) to get rid of a huge problem for injured plaintiffs whose health insurance (e.g., Blue Cross, Excellus, Guardian) pays for their medical treatment. The statute is complex and has many parts, but the part New York injury attorneys are applauding provides, in laymen’s terms, that your health insurer can’t dip into your personal injury settlement for reimbursement of their payment of your medical bills. This not only leaves you, the injured plaintiff, with more money at the end of the day, it also makes it a hell of a lot easier for your personal injury lawyer to settle your case.
Why? Well, let’s say you slip and fall on ice at a store parking lot and are injured, but it is really, really tough to prove that the store is legally liable. There was an ice storm going on, and most juries would say the store is not liable for that because the store really couldn’t do anything to prevent it. Nevertheless, your lawyer might be able to get a $20,000 settlement offer from the store’s insurance company because they are afraid that, just maybe, you might win at trial (especially if you have a convincing lawyer!), in which case a jury would probably give you $100,000. So the store’s insurance company essentially wants to hedge its bet.
BUT (and here’s where the health insurers used to screw the whole deal up), your health insurer has paid out $20,000 in medical treatment for your slip-and-fall injury, AND THEY WANT IT BACK! In fact, if you read the fine print in your health insurance policy, it specifically says you agree to pay them back first from any money you get in a settlement or from a verdict! That leaves you with nothing if you settle, so why would you? Your lawyer is then forced to negotiate with the health insurance carrier to try to get them to reduce their “lien” (that’s what we call it in the law business), but even then this leaves you with almost nothing.This “lien” or “subrogation right” of the health insurer just gets in the way of fairly resolving your case.
BUT THOSE DAYS ARE OVER. They can’t do that anymore. And this is only fair. After all, your health insurance carrier was charging you a hefty premium in exchange for agreeing to cover your medical costs in the event you got sick or injured. Why should they have a right to charge those big premiums from you and then reach into your pocket for yet more money from your settlement? Isn’t that double-dipping? Aren’t they getting paid twice for the same thing, once when they charge the premiums, and then again when they “hold you up” at the end of your personal injury case?
In signing this legislation into law, Governor Patterson essentially told the health insurance industry, “Get your greedy hands out of those poor injured plaintiffs’ settlement pot”.