Life Care Planning and The Affordable Care Act (Obamacare)
Given the publicity over the past year or so, Stokes & Associates has been asked questions regarding how the ACA might affect life care planning in the future. Specifically, we have been asked to address the cost of healthcare insurance under the ACA with regard to the maximum out-of-pocket health care expense as a function of total medical costs related to injuries.
The most obvious issues in analyzing the ACA relate to how collateral source rules might apply and what services are actually covered under the ACA. For example, will juries be told that under the ACA the plaintiff has coverage with maximum out of pocket costs of $6,350 per year? Can an offset be taken for the cost of premiums since everyone is mandated to have or buy coverage? Are the fees paid by the carriers considered collateral sources and the defendant is still responsible for 100% of the future medical costs? Can a life care plan merely list the maximum out of pocket cost, premium amounts for health care coverage, and the costs of those services not provided for under the ACA? Will mandated coverage be treated the same as structured settlements and annuities?
To begin discussion of these questions, some background information may be helpful. Life care plans are used in personal injury litigation to determine the future medical care costs to an injured party. The costs must be related to the injury in question, be of medical necessity on a more probable than not basis, and be specific in service, supplies, equipment, frequency and duration in order to be reliable enough to include in the plan. By including only items or services that meet these criteria, the life care planner can eliminate unnecessary legal challenges to the validity and admissibility of the plan.
Generally accepted life care planning methods suggest that the plaintiff will pay for the items at consumer price levels (“cash pay price”) as opposed to basing future costs on collateral sources such as public programs or private insurance. Since the implementation of the ACA on January 1st. 2014, insurance coverage is widely available and the carriers are not allowed to discriminate for pre-existing conditions. This is known as the “guaranteed issue” provision. The ACA also prohibits lifetime or annual dollar limits for essential health benefits and the insurance coverage must be available and renewable. The law also provides that individuals will pay the same premiums as any other person of the same age and geographic location. Therefore, with regard to the ACA, juries may be presented evidence that insurance will cover the plaintiff’s future medical expenses.
The ACA provides for:
Essential health coverage for hospitalization and ambulatory care services
Emergency services • Mental health and substance use disorder services
Preventive and wellness services and chronic disease management
Pediatric services including oral and vision care
Rehabilitative and habilitative services and devices including prosthetics, wheelchairs
Physical and occupational therapy. Physical and occupational therapy are often capped by health insurance plans, limiting future services recommended for plaintiffs.
The ACA does NOT cover:
Long term care
Nursing care and home care.
These excluded services can make up a substantial portion of the costs included in a life care plan.
So what do we think will happen? It is probable that attorneys representing plaintiffs will consider the ACA a collateral source, arguing it should not be presented to the jury as a reasonable form of future medical compensation. This strategy would imply that the defendant would be wholly responsible for future medical care costs identified in a life care plan. Even if the courts admit information about the ACA, plaintiffs are likely to present the evidence of the future costs that are not covered under the ACA. Plaintiffs may likely argue that the ACA is subject to repeal and thereby insufficient as a permanent and stable payment source. Additionally, repeal of the ACA may lead to plaintiffs seeking relief under public insurance programs such as Medicare or Medicaid to pay for services, shifting the burden from the defendant to the taxpayers.
Attorneys representing defendants have begun presenting the ACA as the “current law of the land,” suggesting that the life care plan should include only the maximum out of pocket costs, including any caps, and those services not covered under the ACA. Another potential argument by the defense is that due to the individual mandate, plaintiffs are responsible for the costs of the premiums and therefore premiums are not to be included in the costs of a life care plan. Further, due to the guaranteed issue, the defendant can argue that injured plaintiffs are eligible to purchase health care coverage to pay for their medical costs, and by not doing so fail to mitigate their losses. It is also possible that the ACA will be used as incentive to negotiate settlement, citing the out of pocket costs as substantially less than reported by experts.
The role of the ACA in calculating future medical damages is largely unknown at this time, yet the issue will certainly become more prominent in the near future. Our experts strive to study the issue by keeping abreast of the latest developments in the literature and in the courts, and we are available to discuss this issue further at your convenience.
For a more detailed discussion of the issue, see:
Yagerman & Bookman, 2014
Matheson, Karraker and Congdon – Hohman, 2015
Congdon – Hohman and Matheson, 2012
We offer complimentary consultations concerning "hypothetical matters". To strategize with one of our experts at Stokes & Associates, please call David Barrett at 504-454-5009 or email firstname.lastname@example.org.
Larry S. Stokes, Ph.D.
Aaron Wolfson, Ph.D.
Todd Capielano, M.Ed., LRC, CRC, LPC, CLCP
Lacy Sapp, MHS, CRC, LPC, LRC, CLCP