I just resolved a case and was able to use Colorado’s new “Made Whole” statute in a way that was a big benefit to my client.
The “Made Whole” law, Colorado Revised Statute §10-1-135, is a power-packed law for injured persons, and it provides several benefits bey0nd the single aspect I am going to discuss here. Nonetheless, here goes:
The primary thrust of 10-1-135 is this: If an injured person’s total damages exceed available insurance limits, then benefit providers who have provided care benefits (read: health insurance companies) do not have the right of repayment in most cases. This seems underwhelmingly simple and straight-forward, I know, but it has some profound effects and drastically changes the law before it in Colorado.
The rationale for this law was simple and best described in a hypothetical: Hypothetical Harold is partially paralyzed in a car accident and incurs more than $200,000 in medical bills (paid by Harold’s health insurer, and owed back by him from any recovery). Harold makes a claim against the at-fault party’s car insurance, but finds out that at-fault party has only the minimum liability coverage limit of $25,000. If (and this is a big if) the at-fault party’s insurance company goes ahead and pays out its $25,000 policy limits to Harold, under old Colorado law, his health insurance company has a right to be paid back 100% of the charges it paid on Harold’s behalf. Obviously, Harold would never see a dollar of the money from the at-fault’s insurance policy; it would go directly to the health insurer to satisfy its right to be repaid. Did Harold need future medical care that could be paid for with that money? Too bad. Was Harold laid off from his job because he couldn’t work after the injury? Again, that’s unfortunate. The money would go back to the health insurer for its past bills paid. This is an extreme example, of course, but one that does occur.
I forgot to mention that if Harold hadn’t made a claim against the at-fault party for his injuries, his health insurance company wouldn’t have asked him to repay his medical expenses. Only if he asserted his rights was he charged!
In case after case, this scenario played out for people all over the state. This left an injured party in the situation where they had successfully sued someone who had hurt them, and ended up with little to no compensation for their injuries, future medical treatment, pain & suffering, economic loss and other damages.
This is exactly the scenario in which my client found himself. He badly broke his ankle during an outdoor excursion by another person who negligently caused him to fall.
As a result of this serious injury, my client required an ambulance trip, an emergency room exam with a full diagnostic work-up of the injury including MRI, and ultimately two surgeries to repair his ankle. The first surgery was soon after the injury, and the second was several months later to remove some hardware that was installed in his ankle to help it heal. In the midst of the surgeries, he underwent rigorous physical therapy to help rehabilitate his ankle so that he improved as much as possible given the circumstances.
He was let go from his job because it was an “on your feet” sales job, where he made physical sales calls and deliveries. While they didn’t want to do it, the company couldn’t have an employee on the mend for six or more months who couldn’t be in the field making sales. He got a new, lower-paying job without the health benefits he had previously, but that he could perform while he was rehabilitating. That’s when I met him for the first time.
We were able to reach a speedy conclusion with the at-fault party’s insurance carrier. They were reasonable and tendered the policy limits available under the policy, which limits were $100,000.00. In this case, however, my client’s actual past medical charges alone were roughly $60,000.00. This number did not include lost income from his previous job, future medical expenses for additional rehab or other procecures that might be necessary, pain and suffering for having to undergo two surgeries and strenuous rehabiliation, the difficulty of living in a cast and walking on crutches for weeks, and the increased likelihood of arthritis or other permanent symptoms of this injury that cannot be fixed.
We used the new law to the client’s advantage, and sent a letter notifying the health insurance carrier that, under the new law 10-1-135, they were not entitled to a repayment of the past medical benefits that they had paid. They acknowledged that the law applied, and we were able to turn a five-figure medical bill that my client allegedly owed into a zero. Every dollar that he would have previously had to pay for his past medical charges instead went directly to him, and he was made whole. Remember, in his case, the amount he owed for his past medical charges was more than the policy contained.
He has since been able to repay the small amount of short-term debt that he incurred while he was injured, so that the injury didn’t cause him to be financially displaced. He has made the wise decision to take his recovery, which was substantial given the policy limits and bills he faced, and place it in a low risk investment vehicle. He knows that he has an ankle that is not fully healed, and may never be. He knows that he might need that money to take care of those charges, and he’s learned that life throws unexpected things his way.
This is a true story of success for my client, and I am proud to have been able to assist him in turning a very unfortunate situation in to one that has kept him moving along in a positive manner. The effect of this law is not to turn people into millionaires. I imagine that there are very few people who would willingly shatter their ankle for a one-time payment of $60 to $70,000.00. But it does help people like my client, by giving them an opportunity to recover from a serious medical setback with some confidence that they have the resources to manage what else may come from their injury in the future.
This law, like every one of them, has certain exceptions to the rules that it creates. Give me a call at (720) 256-2438 to discuss this case in more detail, as well as the ins and outs of the law if you’re interested in learning more.