Montana Health Plan Subrogation: Full Compensation First

By the FigureMyTax Editorial Team · How we calculate

A Montana health insurer's subrogation right may not be enforced until you have been fully compensated for your injuries. You may ask it to pay a proportionate share of the reasonable costs of the action, including attorney fees, and if it elects not to, it waives 50 percent of its subrogation rights.

The statute

MCA 33-22-1601 lets a disability insurance policy provide for subrogation against a judgment or recovery from a third party who caused the injury, as provided in 33-22-1602. That section requires you to give the insurer reasonable notice of your intent to sue, lets you ask the insurer to pay a proportionate share of the reasonable costs of the action including attorney fees, and says that if it elects not to participate it waives 50 percent of its subrogation rights. The right may not be enforced until the injured insured has been fully compensated for the insured's injuries.

Health service corporations

Sections 33-30-1101 and 33-30-1102 say the same for hospital and medical service plan contracts of health service corporations.

A worked example

Say a health plan paid $9,000 and you settle for $100,000 with a one-third fee and $3,000 in costs. If you are not fully compensated, the plan recovers nothing. If you are, and it agrees to share costs, it recovers about $5,730; if it declines to share, it waives 50 percent and recovers about $4,500. The Montana medical lien calculator offers those positions.

What a compendium reports

A law-firm compilation of Montana subrogation law reports that Montana follows one of the strictest versions of the made-whole doctrine, requiring that you be totally reimbursed for covered losses and costs, including attorney fees, before an insurer subrogates, and that more recent decisions apply it by category of covered loss. We did not read the decisions, so treat these as leads.

What to do

Give the plan written notice before you sue, ask whether it will share costs, ask for the plan document and whether it is insured or self-funded. A self-funded employer plan is governed by federal law. See how provider liens differ and the Medicare and Medicaid post.

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