In a long awaited decision, McCutcheon v U.S. Airways, the U.S. Supreme Court ruled that a participant must reimburse a Health Plan for the payments the Health Plan made for the participant’s care, if the participant recovers money from other third parties because of the injuries suffered.
It doesn’t take a genius to realize that this “third party” they are talking about are insurance companies.
Although I understand this ruling and its ultimate goal of lowering health care costs, there is one big issue I have with it. An insurance policy is a contract between two parties, the owner of the policy and the insurance company. The goal of the policy would be to make the purchaser whole in the event of a covered loss. After the insurance company indemnifies the claimant, they have the right to subrogate and try to get back the claim money they paid to their policy holder from the party who was responsible for the loss (or in most cases their liability insurance company).
It seems that in the end, this ruling will hurt insurance policy owners just like you and I. As an agent I am constantly adding additional insureds or banks to insurance policies. Now it seems that your health insurance company may as well be an additional insured on your policy because they are entitled to money you receive for your injuries. This brings me to my final point which is actually a question. Given health insurance company’s recently restricted ability to underwrite on the individual level and their right to casualty payouts spelled out in this ruling, is the health insurance industry worth of being called “insurance” anymore?