The rights of Ohio citizens harmed by the negligence of others to obtain due compensation for their injuries have been dwindling over the course of the past two decades. Tort reform measures such as damage caps, shorter time limits for the filing of claims, and new statutory defenses available to wrongdoers have not only drastically cut the number of injury cases filed in Ohio courts, but have also severely impacted the amounts that injured parties are able to recover in a civil lawsuit.
In many cases, plaintiffs receive far less than the amounts obtained via settlement or judgment due to their health insurers’ ability to seek “subrogation” on the claims. Subrogation, which has become more common and is now included in most health insurance policies, permits these insurers to recoup any amounts that they pay for injuries caused by liable third parties from a settlements or judgment obtained by their injured customer, thus reducing the amount that ends up available to the victim at the end of the day. Indeed, according to a recent Bloomberg report, in 2014 Medicare recovered approximately $2.5 billion via this process, and it is estimated that insurers can take up to $180 million from the recently-approved NFL settlement to compensate former players suffering from conditions related to head trauma.
Subrogation can be a major concern when the amount available from the negligent party is limited due to things such as inadequate liability insurance, or when there are concerns about the ability to prove a case throughout litigation because of affirmative defenses or expense. For instance, if an individual is involved in a major automobile accident that causes severe and permanent injuries for which their health insurance has paid over $100,000 in medical expenses, but there is only $50,000 available from the at-fault party’s insurance and assets, then the victim can end up with next to nothing via a civil lawsuit, despite being left with a disabling condition through no fault of their own.
Recently, however, the Ohio General Assembly passed new legislation that could have a positive impact on the victim’s ability to receive due compensation, or to be “made whole” for the harms done against them. Under the new law, which was recently passed as part of the annual budget bill, some insurers will have to accept reductions of their subrogation claims by the same proportion as the injured victim’s claim due to these concerns regarding the collectability of a claim. This new law will hopefully lead to a more fair and just approach to the distribution of settlement and judgment monies, as certain insurers will have to accept the same risks and obstacles to recovery, instead of merely piggybacking on their customer’s efforts to seek due compensation through litigation. Although there are far too many laws on the books which aim to protect insurance and business interests at the expense of injured Ohio citizens this provision represents a small step in the direction of a more equitable civil justice system.