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Paul is injured in a car collision when the defendant runs through a red light and hits Paul's car in an intersection. Paul goes to the emergency room and attends physical therapy for the next two months as he recovers. He submits all of his medical bills to his health insurance company. A few months later, defendant's automobile insurance company accepts liability and offers Paul a settlement. Paul agrees accept the settlement only to learn that over half of the settlement will not go to him, but will go directly to his health insurance company as reimbursement for payment of the medical bills.
Paul is left wondering why does his health insurance company get paid more than he does? Better yet, why does his health insurance company get paid anything? After all, doesn't Paul pay premiums so that his health insurance will cover the bills?
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