In a previous post, we discussed emerging issues relating to the calculation of future medical expenses under the Affordable Care Act – specifically, how the ACA could alter the common law collateral source rule and completely change how future medical damages are calculated. Building on that post, under the ACA (in its current form) it no longer makes practical or theoretical sense to continue the current method of calculating future medical damages and excluding evidence of insurance coverage by invoking the collateral source rule. Indeed, by “guaranteeing” universal health insurance the ACA waters down plaintiffs’ core argument for excluding insurance in future medical cost calculations and it undercuts a major purpose of the collateral source rule.
The ACA strikes down a core argument plaintiffs use to justify future certain medical damages: “there is no guarantee of health insurance.” Under the ACA, every individual is guaranteed a certain “minimum essential” coverage, and every eligible individual is required to purchase at least a qualifying minimum essential coverage plan. Moreover, the ACA allows dependents and young adults to remain on their parents’ insurance plan until the age of 26. This means that every American, regardless of age, health, race, or class, likely will have access to health care. Thus, because of the ACA, plaintiffs can no longer credibly claim a possible lack of health insurance as a justification for future medical damages.
The obvious challenge to this rationale is excluding evidence of health insurance under the collateral source rule, which prevents defendants from introducing evidence; however, the ACA seems to undercut some of the policy reasons for the rule.
One of the most prevalent policy reasons for refusing to allow evidence of insurance coverage is that tortfeasors should not benefit from a plaintiff’s choice to purchase insurance. The idea here is that since the plaintiff made the responsible choice to purchase insurance, the plaintiff should reap the benefit of the responsible choice, not the negligent defendant. The ACA, however, make purchasing healthcare a requirement and it imposes a fine (or a tax) on individuals who do not purchase insurance. Under this new reality, the collateral source is no longer giving plaintiffs the benefit of their bargain; the rule is giving an undeserved windfall to plaintiffs and needlessly punishing defendants. At the very least, the guarantee of minimal essential insurance coverage should be factored into future medical damages calculations.
As Bob Dylan said, “the times they are a-changin’.” For now, the courts continue to exclude future medical damages and cite the collateral source rule. However, assuming the major aspects of the ACA remain intact, these long followed rules may soon give way.
To learn more about the Affordable Care Act, the collateral source rule, and personal injury litigation, please be on the look out for our third, and final, installment of A Distinct Dilemma: The Effect of the Affordable Care Act on Calculating Future Medical Expenses. Also, subscribe to The Bassett Bulletin to make sure that you don’t miss any of our continuing coverage of litigation issues and insights.