Made Whole Issues

Posted by Michael Russell

Question:
I need some fresh thoughts on a made whole issue I am briefing. Here’s the scenario: Client is severely injured in a collision. Health insurer pays substantial medical bills. Tortfeasor's limits are inadequate, but it's all we can get. Health insurer's subrogation provision does not contain Lawson language, so the made whole rule applies. (The insurer concedes this point.) The issue becomes whether client received "full compensation." Health insurer argues that the total of compensation received must include the amount of the subrogation interest and quotes Copeland Oaks ("The made-whole rule provides that an insurer cannot enforce its subrogation rights unless and until the insured has been made whole by any recovery, including any payments from the insurer.") I think this argument is a stretch, and there is some helpful language in Blue Cross v. Hrenko. Why does the subrogation interest get to be added into the amount of compensation - making "full compensation" more easily in reach?

-Ohio Attorney

Answer:
The determination of what elements make an insured ‘made whole’ vary from court to court. Unfortunately Copeland Oaks does consider insurer benefits in its made whole calculation and the case has been cited 14 times for this issue. I haven’t found any cases which state the opposite- that insurer benefits should not be included in make whole determinations. However I did come across Minnesota’s subrogation statute which specifically excludes such benefit payments (“full recovery does not include payments made by a health Plan to or for the benefit of a covered person” MSA 62A.095(2)). Maybe something to go on or argue…

Mike Russell