What is the Made Whole Doctrine?

The Personal Injury Law Offices of Laskin Balma in Sacramento California has used this doctrine a couple of times lately. People don’t know this, but when you are injured by a third party, if your insurance companies provided medical benefits they have a right to get back what they spent on your care from the adverse party. This is a portion of money that comes out of the global settlement. So basically, they are taking money away from you to offset their costs of paying your medical bills.

Many people think this system is not fair as members pay their premiums every month for the coverage and the money being paid to the health insurance company is coming out of their settlement. It’s like the insurance company is being paid twice. On the other hand, it’s not the insurance company’s fault you got injured. The person who hurt you is ultimately responsible for your medical bills. Whether the settlement gets used to pay doctors directly or medical insurance companies who paid the doctor’s bills, the resulting amount in your pocket should theoretically be the same.

At the Law Offices of Laskin Balma in Sacramento California we do everything we can to maximize the amount our clients take home because we understand that they are the ones who have suffered the most damage. Part of our strategy is to use the cost-sharing argument. Cost-sharing is when an insurance company reduces the amount they are owed by 1/3 to share in the cost of hiring the attorney. The theory is that without the attorney’s work, the client would not have the settlement and the insurance company would not have anything to collect from. While representing our client, we simultaneously protected the interests of our client’s insurance company and they should pay a portion of the attorneys fees. This argument can reduce a lien by a third, but sometimes, that isn’t enough to make a client whole.

The goal of the civil justice system is to return people to the same circumstances they were in before the injury occurred. Compensation should be equal to what a person lost. You sometimes hear stories of million dollar verdicts that change a person’s life, but in reality, to win that kind of verdict, the Plaintiff must have proven that they had suffered or would suffer that amount of loss in the future. Future wage loss comes to mind. If a person can no longer do the job they were getting $50,000.00 a year to do and they would have worked for 20 more years, their damages are $1,000,000.00. Doesn’t that make sense?

Ninety-nine percent of the people making claims and suits are not trying to get rich, they are only trying to get compensated. So when you have a policy limits settlement of $15,000.00 and your insurance company is asking for the $10,000.00 they paid out to be reimbursed, it’s an impossible situation. Even the cost-sharing reduction would put the take home amount at $3,333.33. That is not fair and that is when we use the “made whole” doctrine to persuade health insurance companies to make drastic cuts or waive their lien altogether.

Sapiano v. Williamsburg National Insurance Co. makes it clear that an insured has to be fully compensated before an insurance company can recover anything. It also says that the made whole doctrine can be overcome, but only if the insurance company assisted with the case. If they want the full value of their lien to the detriment of their insured, they have to prove that they helped and didn’t just sit back on their laurels waiting for their portion of the settlement without lifting a finger.

It is the opinion of Laskin Balma Attorneys at Law in Sacramento California that a health insurer should never recover more than the client. If worse comes to worse, we will propose a three-way split between the attorney, the client, and the insurer. Sometimes it works, but sometimes the insurance companies dig their heels in. But we never back down from a fight. We will always do everything in our power to see our clients made whole.

Need advice? Feel you have a potential personal injury case? Contact Laskin Balma Attorneys at Law in Sacramento California today.