Which statement describes subrogation in health insurance?

• A. The insurer's right to pursue recovery from a third party responsible for the loss after paying a claim.
• B. The insured's right to sue a provider for overcharges.
• C. The policyholder's obligation to reimburse the insurer for overpaid claims.
• D. The insurer's right to cancel a policy after a loss.

Answer: (A)

Subrogation is the insurer’s right to pursue recovery from a third party responsible for the loss after the insurer has paid the claim. This means once the health plan pays medical expenses, it can seek reimbursement from the person or entity legally at fault (such as a driver in a car crash or an at-fault party in another incident). This prevents the insured from collecting twice—both from the insurer and from the third party—and helps keep insurance costs down by transferring the recovery to the insurer.

The other descriptions don’t fit subrogation: one describes the insured suing a provider for overcharges, another describes the policyholder reimbursing the insurer for overpaid claims, and the last describes canceling a policy after a loss.