Question:
Do the VA subrogation rights apply to UM coverage, or do they only apply to the responsible third-party?
Answer:
The right of the VA to recovery from UM is not a definite yes or no answer.
When the VA cannot recover:
In researching UM recovery in VA cases, we have to look to the language within the UM plan. According to Government Employees Insurance Co. v. Andujar, 773 F.Supp. 282, it was determined that the ability of the US Government was only able to recover the “reasonable value” of medical benefits from the tortfeasor, who was an uninsured driver. The argument is that under 42 U.S.C. § 2651(a), the code specifically applies to that of the responsible third party. In this case, the United States did understand that the UM insurer, GEICO, was not the liable party, but sued them for benefits anyway. Ultimately it came down to the language of the GEICO plan, which specifically excluded the United States from recovery in the “Exclusions” section of the policy, stating “We do not cover the United States of America or any of its agencies as an insured, a third party beneficiary, or otherwise”.
When the VA can recover:
There are cases where the VA has been able to recover based on the ambiguous language of a UM plan. In United States v. State Farm 936 F. Supp. 206, 1991, the court ruled in favor of the United States in its recovery due to the following provision within the State farm policy, “Payment of Medical Expenses: We ma pay the injured person or any person or organization performing the services.” This was vague and basically permitted the United States to pursue recovery of medical benefits paid.
Other cases where the United States has won the right to recover from UM:
United States v. United Services Automobile Association, 431 F. Supp 735 5thCircuit 1970
United State v. GEICO 440 F. Supp. 1338 5thCircuit, 1971
United States v. Automobile Club Ins. Co. 522 F. Supp 1 5thCircuit, 1975
So basically speaking, the attorney is advised get a copy of the UM specific plan description to be sure that the language specifically excludes the United States from receiving repayment for medical expenses. If there is no provision, then they can recover from UM benefits.
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