Define "subrogation" in health insurance.

Subrogation in health insurance refers to the process through which an insurance company seeks to recover costs it has paid out for claims from third parties who may have been responsible for causing the insured person's loss. Essentially, if a health insurer covers the medical expenses of a policyholder and later finds that these expenses should have been covered by another party's liability (for example, in the case of an accident), the insurer can pursue that third party for reimbursement.

This mechanism is crucial because it helps insurers reduce their overall costs and can help keep premiums lower for policyholders. By actively seeking recovery from responsible parties, insurers ensure that they are not bearing the financial burden for injuries or damages that are someone else's fault. In doing so, it aligns with the principles of fairness and accountability in the insurance industry, allowing claims to be paid out without the insurer permanently absorbing those costs if another party is found liable.