What is a Medical Lien?

To understand health insurance liens, you must first understand how personal injury claims work. When a person is injured, their health insurer often pays medical expenses on their behalf. This is true whether the injured person has private, employer-sponsored health insurance, or government-administered health insurance like Medicare and Medicaid. When those insurers pay medical expenses on account of someone’s injury, the insurer sometimes has a lien (also known as a claim for subrogation or reimbursement) from the injured person’s liability settlement. Simply put, this means the health insurer may make a claim for reimbursement from the victim’s settlement.

How Will the New No-Fault Law Impact Health Insurance Liens?

Michigan’s auto insurance law experienced a significant reform in 2019. Up until this point, health insurance liens didn’t really affect auto accident victims. Under the old no-fault system, auto accident victims looked to their own no-fault insurer to pay for their medical expenses. These medical expense benefits were the responsibility of the no-fault insurer for the duration of the victim’s lifetime. That meant at-fault drivers weren’t responsible for another person’s medical expenses. In addition, a no-fault insurer generally could not assert a lien for medical expenses against the victim’s recovery from the negligent driver.

Importance of Lifetime, Uncoordinated No-Fault Benefits

These fundamental rules will change due to the 2019 changes in the law. However, people can protect themselves from this situation happening by opting for lifetime (uncapped), uncoordinated no-fault benefits from their no-fault insurer. Uncoordinated medical benefits mean the no-fault insurer must pay for medical expenses even though similar benefits may be payable to the injured person under a health insurance policy.