Question
My lawsuit from an auto accident ( I was not at fault)was dismissed due to legal malpractice. I hired another attorney and I settled the legal malpractice case and have received an amount about equal to my medical bills. Am I obligated to repay my health insurance out of the legal malpractice award since i originally signed a subrogation agreement after the auto accident. Also, if I do not repay them can they deny me future health coverage? I live in Illinois. Thank You.
Answer
Interesting set of questions!
Ask the lawyer who handled the malpractice case for you, as your LEGAL duty to repay likely depends on the precise wording of the subrogation agreement which sets out the rights and duties, and perhaps the settlement agreement or verdict in the malpractice case. In any event the health carrier would have to bear its share of the legal fees, etc.
If it is entitled to collect on the subrogation agreement, or thinks it is, the health carrier could sue you for the funds.
As to cancelling your health policy, I don't have a clue as to the type of policy (individual or group, for example) or your state's laws on the subject.
Answer
First I am not an attorney, but I have been down many of these roads before that come up in this forum. My guess would be that the insurance company's right to subrogation died with the dismisal of your personal injury case. The money you received from the malpractive deal should have nothing to do with them. However they may see it very differently. Can they stop paying your claims? Probably. If so, sue them, or change insurance carriers if you can.
As with any subrogation claim if they do pursue reimbursement from you, you may be able to claim that the money you received did not "Make you Whole". This seems pretty reasonable if all you got was equal to your medical bills. You can also try to negotiate what you repay them. Reduce what they get by your lost wages, what you had to pay the attoreny, and your own "pain and suffering."
If you are talking about big bucks ($10,000+?) you can bet the insurance company will come sniffing around.
I would suggest doing a search on the internet in the areas of "subrogation rights" and also try looking for "Made Whole Clause" in your state.