When you are injured in an accident, one of the most common questions the personal injury lawyers of Zneimer & Zneimer P.C. hear is: “If my health insurance already paid for my medical bills, can I still recover those expenses from the person who caused the accident?”
In Illinois, the answer is yes, thanks to a legal principle called the Collateral Source Rule.
What Is the Collateral Source Rule?
Under Illinois law, the Collateral Source Rule protects injury victims by allowing them to recover the full value of their medical bills and other damages from the at-fault party, even if some or all of those bills were already paid by another source—such as health insurance, Medicare, or Medicaid.
The reasoning is simple: the wrongdoer (the negligent driver, property owner, or other responsible party) should not benefit from the fact that you had the foresight to carry insurance. The law ensures that the financial burden falls on the party who caused the harm—not the victim, and not the victim’s insurer.
Key Illinois Supreme Court Decisions
Two important Illinois Supreme Court cases confirm this principle:
- Arthur v. Catour, 216 Ill. 2d 72 (2005): The court held that a plaintiff may present the full billed amount of medical expenses to the jury, even if insurance or another collateral source paid a lesser amount.
- Wills v. Foster, 229 Ill. 2d 393 (2008): The court reaffirmed and expanded this rule, making clear that even when medical providers accept reduced payments (such as Medicare or Medicaid rates), plaintiffs are still entitled to claim the entire billed amount as damages.
Together, these cases make it clear that the measure of damages is the reasonable value of the medical services—not just the discounted rate paid by insurance.
How This Works in Practice
Here’s an example:
- You are injured in a car accident, and your hospital bills total $50,000.
- Your health insurance company pays the hospital at a negotiated, discounted rate of $30,000.
Even though your insurer satisfied the bills for less, Illinois law still allows you to claim the full $50,000 in damages from the at-fault driver. This ensures the negligent party cannot escape responsibility just because you had coverage.
What About Insurance Reimbursement?
While you can recover the full billed amount, your health insurer may have the right to be reimbursed from your settlement for the amount it actually paid. This is called subrogation.
The important detail for clients is this:
- The insurer only gets reimbursed for what it actually paid ($30,000 in our example).
- The difference between the billed amount and the discounted rate (here, $20,000) typically goes to you, the plaintiff.
This means the collateral source rule often results in more money in your pocket after your case is resolved.
Why This Matters
Insurance companies and defense lawyers often argue that plaintiffs should only recover the discounted amounts. Illinois courts have consistently rejected this argument. As Arthur and Wills confirm, it is unfair to let a negligent party off the hook simply because a victim had the good sense to carry insurance.
The personal injury lawyers of Zneimer & Zneimer P.C., make sure our clients take full advantage of the Collateral Source Rule. Our team carefully negotiates insurance liens and fights to maximize your net recovery—so that you walk away with as much money as possible.