What does "subrogation" entail in health insurance?

Subrogation in health insurance refers to the process where an insurer seeks reimbursement from a third party after it has paid for a claim on behalf of the insured. This typically occurs in situations where another party is responsible for the insured's injury or loss. For instance, if an individual is injured in a car accident caused by another driver, their health insurance might cover medical expenses initially. The health insurance company can then pursue subrogation, seeking reimbursement from the at-fault driver's insurance company for the costs it incurred.

This concept is essential because it helps insurers recover some of their costs and can lead to lower premiums for policyholders. By enabling insurers to reclaim funds from parties responsible for accidents or injuries, subrogation reduces the overall financial burden on insurers, which may ultimately benefit all policyholders through more manageable premium rates.

In contrast, the other provided options do not relate to the concept of subrogation. Renewal refers to maintaining an existing insurance policy, coverage services for the uninsured deals with access to health care rather than reimbursement processes, and estimating premium increases focuses on future costs rather than recovery of costs after claims have been paid.