Maine Health Insurer Reimbursement: The Just and Equitable Basis

By the FigureMyTax Editorial Team · How we calculate

A Maine health insurance policy may not give the insurer priority over you for payment from your recovery. It may provide reimbursement only with your prior written approval and only on a just and equitable basis, so that anything that reduces the value of your claim reduces the insurer's share too.

The statute

24-A MRSA 2729-A says no health insurance policy shall provide for priority over the insured of payment for hospital, nursing, medical or surgical services or expenses paid under the policy when the insured is entitled to reimbursement from another person through a legal action or claim. A policy may contain a provision, approved by the superintendent, that requires the insured's prior written approval and allows payments only on a just and equitable basis and not on the basis of a priority lien. Section 2836 says the same for group and blanket policies.

What "just and equitable" means

Any factor that diminishes the potential value of your claim likewise reduces the share of those claiming reimbursement. The factors include questions of liability and comparative negligence or other legal defenses, exigencies of trial that reduce a settlement or award, and limits on the amount of applicable insurance coverage that reduce the claim to an amount you can recover. A dispute is decided by the court where the action is pending, or by a new action if none is pending.

A worked example

Say a health plan paid $9,000 and your claim is worth $300,000 but the at-fault driver has only $100,000 of insurance, so you recover $100,000, one-third of its value. On a just and equitable basis the plan's share is reduced in the same proportion, to about $3,000. The Maine medical lien calculator lets you enter the percent by which your claim is diminished.

The made-whole rule and fee sharing

A law-firm compilation of Maine subrogation law reports that the made-whole doctrine does not apply in Maine health insurance cases because these statutes disallow a first-priority lien and provide for equitable reduction instead, and that the common fund rule applies under a 1997 Maine Supreme Judicial Court decision. We did not read the decision, so the calculator offers a version with and without a pro rata fee share. A self-funded employer plan is governed by federal law, so ask for the plan document.

Auto medical payments

An auto insurer's subrogation for medical payments coverage must have your written approval and subtract its pro rata share of your attorney fees (24-A MRSA 2910-A). See the Medicare and MaineCare post and how hospital liens differ.

This is general information, not legal advice, and the state comparisons above are illustrative, not an exhaustive survey. Confirm how Maine's rules apply to your specific case with a licensed Maine attorney.