Generally overlooked in the national debate surrounding the Patient Protection and Affordable Care Act (ACA) is the effect the new law will have on personal injury litigation. If standard loss-allocation and mitigation rules are followed, the new law should have a significant impact on a personal injury plaintiff’s ability to recover the cost of future medical care, thus limiting a defendant’s exposure for such damages. Though no definitive judicial rulings have been issued on this topic, the new law has the potential to substantially lower the risk of exposure to defendants and their insurers.
The cost of future medical care can be a significant component of a plaintiff’s economic damages, often running into the millions of dollars. In states that do not enforce the common law collateral source rule, which precludes the reduction of a personal injury award by the amount of compensation a plaintiff receives from a source other than the tortfeasor, such awards should be reduced to the cost of obtaining necessary insurance to pay for the care, so long as the insurer does not maintain a legal right of subrogation. Some jurisdictions, such as New York, have limited an insurer’s right of subrogation while other subrogation rights are guaranteed by statute.
Judicial Consideration of the Affordable Care Act
Once the ACA was upheld by the United States Supreme Court and the key provisions of the law took effect, courts began to consider limiting a plaintiff’s economic damages by admitting evidence at the time of trial pertaining to insurance available under the new law.
For example, in Caronia v. Philip Morris USA, Inc., 2013 N.Y. Slip Op. 8372 (December 17, 2013), the New York State Court of Appeals considered whether the plaintiffs (who were smokers for 20 years or more, but who had not yet been diagnosed with a smoking-related disease) could pursue an independent cause of action and recover the cost of monitoring for future diseases. The court ruled that they could not because the plaintiffs had not yet sustained an injury. In a dissenting opinion, Chief Judge Lippman found unpersuasive the defendants’ argument that under the terms of the ACA, the plaintiffs would soon be able to obtain free access to such monitoring. However, he acknowledged that there was a potential for an offset under the law for a reduction of the plaintiffs’ damages. See also, Cowden v. BNSF Railway Company, 2013 U.S. Dist. LEXIS 155486 (E.D.Mo., October 2013).
Duty to Mitigate Damages and Collateral Offset Rules in New York
New York is one of several states to abandon the common law collateral source rule. To prevent double recoveries and to help allocate the costs of compensating plaintiffs for injuries, the New York State Legislature enacted section 4545(a) of the Civil Practice Law and Rules. Pursuant to this rule, a judgment in a personal injury or wrongful death action must be reduced by the amount of collateral source payments. Such payments include amounts that a plaintiff has received or will, “with reasonable certainty,” receive...
