Cost Plus Plans are Full of $#!^

That’s right. I said it.

It’s no news that our health care system is a shambles in this country, and health insurance is only part (maybe a huge part, but that’s another post) of the problem. One of the more complex and frustrating situations is the Cost Plus plan and how it (claims to) interact with your personal injury claim.

North Carolina is an anti-subrogation state, meaning that your health plan CANNOT come back to you and ask you to pay them back what they paid out UNLESS they have some specific law that allows it. The most common exceptions to this are Medicaid, the State Employee Health Plan, Medicare, ERISA plans, and Tricare. These are either government-sponsored plans and/or set up under State/Federal Law that specifically allows for a “right of reimbursement” (NOT subrogation, but once again, the difference between those two is another blog post).

The Cost Plus plan is NOT one of the above. But the argument that administrators of Cost Plus plans make is that the statute that gives them life states “The administration of any cost plus plans as herein provided shall not be subject to regulation or supervision by the Commissioner of Insurance”. 

But the key word is “administration.” The word “administration” obviously doesn’t apply to plan benefits, but rather to the operation and management of the plan.  Anyone can see that under the plain meaning of the words in the statute, the Cost Plus plan’s collection efforts should be prohibited by NC anti-subrogation law.

The Plans argue that N.C. Gen. Stat 58-65-1, “Regulation and definitions; application of other laws; profit and foreign corporations prohibited”, states: “[The plan] shall be exempt from all other provisions of the insurance laws of this State, unless otherwise provided” exempts them from the anti-subrogation rule. But clearly, the statement “all other provisions” implies that it is subject to at least some provisions.

The NC Insurance Commissioner is given regulatory power over the contracts of the Cost Plus plans according to N.C.G.S 58-65-40, “Supervision of Commissioner of Insurance; Form of Contract with Subscribers; Schedule of Rates”. The statute states:

There are some more arguments against the Plans’ points, but it’s a little “inside baseball” for a blog post. Suffice it to say that the claim by Cost Plus plans that they have a right of reimbursement is not settled law and should always be questioned.

Like I always say, this stuff can get complicated, so why try to figure it out on your own? Let a pro handle it. Call me at 919-929-2992.