What is subrogation in health insurance?

• A. The insured's right to cancel the policy at any time.
• B. The insurer's right to sue the insured for overpayments.
• C. The insurer's right to pursue repayment from a third party responsible for the insured's loss after paying a claim.
• D. The policyholder's responsibility to pay all medical bills upfront.

Answer: (C)

Subrogation means the insurer, after paying a covered medical claim, steps into the insured’s legal rights and seeks reimbursement from the third party responsible for the loss. This shifts the financial burden from the insurer to the party at fault (or their liability insurer), preventing the insured from paying twice and helping keep premiums reasonable. For example, if you’re in a car accident caused by someone else and your health insurer pays your medical bills, the insurer can pursue recovery from the at-fault driver. This concept isn’t about canceling a policy, suing the insured for overpayments, or the insured paying bills upfront; it specifically relates to recovering costs from the third party who caused the loss.