The Impact of the Affordable Care Act on Past and Future Medical Expenses Post-Howell

Effective January 1, 2014, the Patient Protection and Affordable Care Act, or, as it is commonly referred to, “Obamacare,” requires most Americans to purchase qualifying health insurance coverage or face a tax penalty. A key feature of Obamacare is health insurance is available to everyone, regardless of pre-existing conditions.

In an ideal post-Howell v. Hamilton Meats world, all personal injury plaintiffs would use their mandated health insurance coverage to treat for their injuries. This would, of course, drastically reduce the medical specials in each case. Not surprisingly, however, the practice of plaintiffs treating on a lien basis has remained the same, if not increased, in an effort to maximize recovery.

In a circumstance where a plaintiff has intentionally decided to treat on a lien basis in lieu of using their health insurance coverage, the defense should argue plaintiff has failed to mitigate his or her damages. Every plaintiff has a duty to take reasonable steps to minimize the loss caused by a defendant’s actions. A plaintiff who does not take these reasonable steps “will be debarred from recovering for those additional damages which result from such failure.” Placer County Water Agency v. Hofman (1985) 165 Cal.App.3d 890, 897.

A plaintiff’s decision to forego required health insurance coverage to treat on a lien basis cannot be considered a “reasonable step” to minimize the loss. In fact, the opposite is true. Plaintiff’s sole motivation is to enhance his or her monetary gain.

As to future medical expenses, the defense should cite to Obamacare as a basis for arguing plaintiff’s future medical expenses will never cost more than the negotiated, discounted rates that private health insurers will pay health care providers.

In each personal injury case, the defense can take the following steps to develop a theme of plaintiff’s failure to mitigate damages:

  1. Plead failure to mitigate damages as an affirmative defense in an Answer to the Complaint.
  2. Conduct discovery directed to plaintiff’s treating physicians (depositions/subpoenas) requesting information about how much that doctor gets paid for the same treatment rendered to plaintiff under health insurance.
  3. Retain experts who understand the implications of Obamacare in relation to whether plaintiff’s future medical care will be covered under Obamacare and the cost of that treatment.
  4. Question plaintiff’s experts on whether they have taken Obamacare into account when assessing the reasonableness of plaintiff’s past medical expenses and calculating future medical expenses.
  5. File a motion in limine, citing to Obamacare, to exclude billed rates as irrelevant for future medical expenses, just as they are for past medical expenses.

Until the Court of Appeal decides a case on this particular issue, the battle between plaintiffs and defendants over reasonable past and future medical expenses under Obamacare will continued to be determined on a courtroom to courtroom basis.

ABOUT THE AUTHOR: Kristi Blackwell is a Partner at Tyson & Mendes. She specializes in general liability, professional liability and business litigation. Contact Kristi at 858.459.4400 or kblackwell@tysonmendes.com.

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