HEALTH INSURANCE COMPANY TAKES AWAY MALPRACTICE SETTLEMENT
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Minnesota schoolteacher Tom Carey mortgaged his house in order to finance a medical malpractice lawsuit against the doctors and hospital whose medical blunders resulted in the prolonged, agonizing and painful death of his wife, Barbara. When the doctors settled, his wife's health insurance company tried to take it all away.
A radiologist missed a spot on his wife's CT scan. The spot the doctor missed showed that his wife's cancer had returned. This mistake allowed the cancer to grow for another year. By the time it was discovered, the tumor was the size of a football. At this late point radiation was the only chance of saving her. Unfortunately however the radiation was so strong that it ate up her intestines. Therefore, all the food that she ate went into her entire body because her intestines were like jelly.
Barbara spent the next two years in and out of hospitals living with an open wound the size of a softball. She died at age 54.
Tom Carey sued the responsible hospital and doctors.
When Barbara's health insurance company got wind of Tom's medical malpractice lawsuit, it slapped a $1.4 million lien against the potential proceeds of the suit. If Tom recovered anything from his medical malpractice lawsuit, his health insurance company would get the first $1.4 million.
Tom Carey had always paid his health insurance premiums and assumed that his health insurance company would protect him and his family against these catastrophic health claims. However, what Tom learned was that instead of providing insurance, when there was a claim against a third party for the loss, all the insurance company really provided was a loan which must be paid back before the victim recovered a dime from a negligent third party.
Tom eventually settled the suit against the doctors and hospital. However, a confidentiality clause in the settlement agreement prevents Tom from disclosing the amount of the settlement. Barbara's health insurance company insisted on receiving $60,000.00 from the proceeds of the malpractice settlement before it would drop its lien.
Tom had no choice but to pay up.
Tom Carey was so incensed about this injustice that he has been fighting to get his $60,000.00 back. Tom has contacted all the politicians in his state and everyone agrees that he has good reason to be upset. However, no one can do anything for Tom.
The culprit is a federal law known as the Employees' Retirement Income Security Act of 1974 or ERISA. This act allows health insurance companies to take the first money away from their insureds out of any recovery the insureds obtain from a claim against the negligent party who caused personal injury.
This unfair law has been interpreted by the federal courts in a way that robs premium-paying health insured victims of money to which they're entitled.
It will literally take an act of Congress to help Tom and many hundreds of thousands of people in a similar situation.
Although most state laws prohibit insurance company from taking money back from their insureds from the proceeds of a personal injury negligence settlement, federal law trumps state law and the insurance companies always win.
At least two-thirds of the health insurance policies which cover Americans are subject to the ERISA law.
Contact your congressman and ask them to vote to repeal this unfair law which enriches health insurance companies at the expense of the working public.
For more information on this subject, please refer to the section on Medical Malpractice and Negligent Care.