Last week, the New York State Legislature passed an anti-subrogation bill. To the general reader, I realize this news needs some explanation, but believe me, this is VITAL information for anyone who lives in New York State and it is GREAT NEWS for NY consumers!
Roy gives a very technical explanation, but the real gist of it is that this new law will prevent health insurance carriers in N.Y. from getting away with their historic practice of “double dipping.”
You can check out Roy’s detailed analysis of the new bill in his post “New York State Legislature Passes New Anti-Subrogation Law.”
Below is my less technical explanation of what this new law means to the average person.
What is subrogation – and what’s so bad about it?
As a concept, think of subrogation as you paying someone else’s debt and then your attempting to collect from the person that originally owed the debt. No problem if you do it fairly, but insurance companies have been adding their own twist to the idea.
An example would be: You know Jim owes Mary $40. You run into Mary, she mentions your friend Jim’s debt and you pay it. Then you ask Jim for the money. Fair enough. But what if Mary also asked Jim for the money again? And he paid it again? If he paid you back too, he’d be out $80. Mary would end up with $80 – twice the amount she risked!
The analogy is close to what the insurance companies have been doing for years. First, they charge you HUGE premiums for your health coverage. Then, if you get hurt, and you successfully pursue a personal injury case, they tell you you have to pay them back for the health bills they paid on your behalf!
So essentially, you pay for coverage and then when you use the coverage that you paid for, they say they should get reimbursed IN FULL from YOUR money!
Thankfully, this law will stop this horrible double dipping. I am just glad that the whole health care debate is finally shining a spotlight on some of the egregious past practices of health insurance companies!
Thanks again to Roy A. Mura for his detailed posting about the anti-subrogation bill and his permission to link to it from the NY Injury Law Blog.
Thanks for reading,
James B. Reed, Esq.
Personal Injury & Malpractice Lawyer
Ziff Law Firm, LLP
303 William St., Elmira, NY 14902
Tel. (607) 733-8866 Fax. (607) 732-6062
Toll Free 1-800-943-3529