Does The Affordable Care Act Impact Claims Resolution?
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- Future Medical Care
- "Post Settlement" Issues
Over the past few years I have written several articles regarding the subject of how the Affordable Care Act (ACA) could potentially impact the resolution of personal injury claims. Would or would it not enter in the calculus of case value, as it relates to the cost of future care? I have articulated the arguments both pro and con. Until the issue itself reached a courtroom, much of this was unknowable. We now have a ruling (unpublished) which may not yet be definitive but is certainly enlightening.
In review, the argument for using the ACA to fund future medical expenses asserts that, under the Act, individuals with pre-existing conditions must be covered without regard to medical history; therefore hard dollar damages are reduced. The ACA does indeed mandate that individuals purchase health insurance or pay a penalty. Therefore, whereas in the past an injured plaintiff would most likely be denied health insurance coverage, now not only can that person secure coverage, but they will be penalized if they fail to do so. This leads some to believe that the guaranteed-issue and individual mandate requirements of the ACA will allow injured plaintiffs to address their health care needs through simple purchase of their own health insurance plan rather than through direct compensation for an itemized list of accident-related health care needs.
The argument against using the ACA to fund future medical expenses relates that nothing in the ACA provides that all components of a plaintiff's life care plan will be completely (or even partially) covered by the health insurance policies offered. Furthermore, many of the items identified in professionally-prepared life care plans are not required to be covered by ACA plans and/or are not subject to the maximum annual out-of-pocket limit. Therefore, the ACA could not and should not be relied upon as the provider of future medical care of the injured plaintiff. The key issue which has come to the forefront on this subject has little to do with mere technical aspects like coverage. It is much more profound than that.
In a Medical Malpractice case heard in New Jersey’s Bergen County Superior Court, the plaintiff’s attorney stated their client “Ella”, a 9-year-old girl who was born with neurological injuries including cerebral palsy, has a life expectancy into her forties.(1) They stated Ella is presently afforded health insurance through her parents’ employers. Current medical liens for Ella’s care amounted to $3.2 million dollars. The Plaintiffs asserted that even if Ella only lived into her twenties, the cost of her future medical costs would likely range between $2.3 and $4.5 million dollars.
The Defendants contended that Ella would receive contribution or reimbursement of a majority of those medical costs through the ACA and thus, Ella’s claim for future medical costs at trial should be limited by taking into account the potential contribution and/or reimbursement afforded by the ACA. The Defendants filed a motion seeking an Order of the Court limiting the Plaintiff’s claim for and evidence of future medical expenses.
The Honorable Robert C. Wilson denied the Defendants’ motion because “the Defendants have not shown that there is a reasonable certainty (emphasis ours) that Ella will be covered by the ACA or private health insurance.”(2) He further stated: “the burden of proof rests on the party seeking to limit damages under New Jersey’s Collateral Source Rule.”
Judge Wilson continued: “Case law interpreting N.J.S.A. § 2A:15-97 holds that ‘future collateral benefits are deductible only to the extent that they can be determined with reasonable certainty.’ [T]he phrase ‘if a plaintiff...is entitled to receive benefits’ refers only to those benefits to be paid post-judgment to which plaintiff has an established, enforceable legal right when judgment is entered and which are not subject to modification based on future unpredictable events or conditions. In other words, future collateral benefits are deductible only to the extent that ‘they can be determined with a reasonable degree of certainty.’
“Ella’s right to receive such benefits is likely subject to policy changes, as Congress has sought to repeal and/or undermine the ACA over fifty times. Additionally, longevity of the ACA is overwhelmingly called into question by the upcoming government election. Furthermore, even if the ACA remains in effect for thirty (+) years, Ella’s entitlement to receive such benefits and the amount that she may be entitled to receive is merely speculative.”
Judge Wilson’s concerns revolve around not only the technical details of what may or may not be covered under the ACA but also if the ACA itself would be a viable concern going forward. This ruling provides valuable insight into the subject of how the Courts may view this issue.
This does not necessarily mean that no role exists for the ACA in settlement negotiations. Defendants in some jurisdictions might consider crafting settlement plans which sincerely attempt to address some of the plaintiff’s future damages through purchase of an ACA health insurance policy, including specific and ample funding over time to cover future premiums, copayments, deductibles, coinsurance payments, and out-of-network payments.
Plaintiffs in turn may wish to prepare for the possibility that the defense will make offers crafted in this fashion. In preparing for negotiations, they should examine what future care may or may not be covered under current ACA health insurance policies and what cash flows may be needed to fund the coverage and the non-covered care.
Do you have a case involving intricate future-care issues? Would you like help navigating all these complexities? Call Frank C. Kilcoyne, CSSC at 800-544-5533. I am here to help.
(1) Booth, Michael, “Obamacare Doesn't Limit Recovery in Med Mal Case, Judge Rules”, New Jersey Law Journal, January 27, 2016, accessed 02/29/2016
