What is subrogation in health insurance, and how does it affect payment when a third party is responsible for a claim?

• A. Subrogation allows the insurer to pursue recovery from a third party responsible for the medical cost to reimburse the insurance company; amounts recovered may reduce the insured's out-of-pocket or insurer's loss.
• B. Subrogation increases the insured's deductible.
• C. Subrogation eliminates the need for any patient payment.
• D. Subrogation applies only to life insurance.

Answer: (A)

Subrogation is the insurer’s right to recover amounts it has paid on behalf of the insured from the party responsible for the injury or loss. When a third party is liable for medical costs, the insurer pursues reimbursement from that party or their insurer, and any money recovered returns to the insurer to offset its payment. This can reduce the insured’s out-of-pocket costs or reduce the insurer’s loss, ensuring the responsible party ultimately bears the cost and preventing double recovery. It does not raise the insured’s deductible, does not guarantee eliminating all patient payments, and it is not limited to life insurance.