Nov 30 2012
Finally…a non-controversial blog post.
My mother taught me not say anything if I could not say something nice. Suffice it to say, many times I have fallen short of that aspirational goal. And, diving deep into the Affordable Care Act, I could not find much positive to say.
In particular, there was almost nothing written about reigning in the dysfunctional medico-legal tort system. To the extent anything about med mal is buried in the ACA, it is limited to a “sense of the Senate” – a nonbinding statement used to express the position of the Senate on a particular issue. Through this language, the ACA suggests states should be prodded to “develop and test” alternatives to the existing medico-legal tort system. And Congress should “consider establishing a State demonstration” to run pilot projects on such solutions.” The ACA, however, includes no funding or binding provisions to those ends.
Now, a paper by economists at the College of Holy Cross, Potential Effects of the Affordable Care Act on the Award of Life Care Expenses, suggests that an unintended benefit of the ACA might be med mal premiums coming down.
Well, they don’t say exactly that. But, it’s implied.
Stay with me on this.
Awards for medical negligence are generally divided into the following categories: non-economic damages and economic damages.
Non-economic damages include “pain and suffering” – and many states cap such payouts. Economic damages include lost wages, past medical expenses, and future medical expenses, to name but a few.
Future medical expenses can amount to a whopping number for significant injuries. If a patient becomes quadriplegic, for example, he will incur significant expenses as part of a life care plan – expenses that can reach into the millions. Plaintiff’s lawyers will advocate for a life care plan to make provisions for such expenses.
Here’s where the ACA comes in.
The before picture: If you lacked health insurance before your injury, you might not qualify for insurance after your injury. If you obtained insurance from your job, you might be unemployed after your injury – and ultimately lose your coverage. And you might not meet criteria for government issued coverage.
The ACA essentially guarantees coverage regardless of pre-existing conditions. New out-of-pocket limit will be pegged to Health Savings Account limit which is currently $5,950 for individuals. The authors conclude:
“Thus, the pre-existing condition provision of the ACA and the quality of insurance requirements serve to limit the annual out-of-pocket costs for medical care for any victim of an accident to a maximum of $5,950 plus the cost of a typical health insurance policy in the individual market. This sum may be significantly below the sum of identifiable medical costs in a life care plan.”
The authors continue:
“If the ACA is successful in creating open and affordable health care markets that eliminate health restrictions, awards in personal injury cases could be dramatically impacted. First, the goal is to make the person “whole” by providing adequate funding for a life care plan, not to compensate them from their injuries. The funding of health care through private insurance markets is an equally valid way to accomplish this goal if those markets are available to a victim.”
In theory, if the costs of life care plans for negligently injured patients go down, then medical malpractice premiums should go down. Right?
Well, much of professional liability premiums go to costs beyond payment of life care plans – starting with the cost of defending cases in the first place.
I’m not holding my breath.
If you find any other benefits in the ACA, let me know.
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