My average day is not spent arguing in a courtroom, it’s spent answering questions. All day at work, I get asked questions like, “what’s my case worth?,” “what does that mean?,” “why is the insurance company treating my claim this way?,” or, if bearing bad news, “whatchu mean?!” My responses to these questions and the hundreds of others varies depending on the case and situation.
At home, a lot of time is spent answering questions as well. I get asked questions like, “what’s for dinner?,” “how was your day?,” “why can’t you put your dirty laundry in the hamper and not on the floor?,” or, “what is so hard about loading the dishwasher?” My responses to these questions and the hundreds of others do not vary that much, and typically consist of one of three standard responses: “I dunno,” “Whatever,” or, if the television is on when the question is asked, “Huh?”
I occasionally get questions from you readers as well. Last Friday, a reader sent me an email about my post North Carolinians for Affordable Health Care, which dealt with tort reform in North Carolina. It was a good question, and I know others probably have it as well, so I thought I would take a minute and respond here.
Question: I was a little confused [about your post] because the commercial for the house bill talks about actual cost or out of pocket expenses and you seem to be talking about medical bills. Here is an example that may explain my confusion. I have this medical problem and I get a prescription. This comes with a bill for $304.72, but I only pay $20. So my expense is $20, and I could care less about any medical bill. So we go to trial and ask for compensation – all I want is $20. Well what about the $304.72.? Well, here is the deal. A few years ago I looked at the odds of me getting sick so I decided to gamble some in favor of getting sick. You know, age, cancer, heart surgery, all not great signs for wellness. So now I have companies competing to get in on this deal. They all want to gamble with me. These guys want to bet that I will not get sick, but want to hedge their bet some. They are not totally stupid. I agree to pay them something every month if they pay all my medical bills. I still think this is a good deal for me. Now back to my jury trial. What about the money that insurance company paid, you may ask? Well, that is their problem. The point of all this – and we can argue philosophy all day – the ad that you referenced does not get into all this detail. All it said is why not tell the jury what my true cost was? Anyone I ask that is part of the lawyers profession seems to think that the ad is about actual medical bills, and anyone I ask that is just a guy like me thinks they are talking about the $20. Go figure.
Answer: The issue the ad is talking about is exactly what you describe; meaning it’s a provision in the bill that would allow a jury to award only what is actually needed to satisfy the bill out of your pocket. The term we use for it is Billed v. Paid. The ad does deal with medical expenses as that’s what the provisions in HB 542 itself deals with (Section 1.1). The “actual cost” or out of pocket expenses are part of the total medical bill, they just happen to be the part you are responsible for. To use your example, ultimately the $304.72 is the true, real cost of the medical bill. You pay $20.00 of it because of your insurance and the insurance, adjustments and write-offs take care of the remaining $284.72. The problem with the NCAHC ad is the direct quote , “personal injury lawyers don’t reveal the real costs of medical care, just what they are suing for.” That’s patently false because what I am suing for is exactly the real cost of the medical care, not just what my client may have paid out of pocket. Under current law, you are allowed to claim and a jury can award the full $304.72. HB 542 would make it so that you can only recover the $20.00 that came out of your pocket. We are against this provision of HB 542 for several reasons, among others:
HB 542 is unbalanced. Personally, if you want to talk about how Blue Cross Blue Shield paid $284.72 of my bill and only allow me to get back the $20.00 co-pay, then I’m all for it. But, I should also be able to talk about the Defendant’s liability insurer. Right now, neither side can talk about the other’s insurance. When I go to trial, it looks like my client has a total bill owing of $304.72 and if the jury decides to award them that, then it looks like the defendant themselves will pay for it out of pocket. The jury never knows that health insurance paid $284.72 and that I won’t have to pay that amount of the bill, and they never know that Allstate pays for the verdict of the $304.72. The defendant never pays a dime out of pocket. With HB 542, it now allows the defendant to talk about health insurance, but we will still never know about Allstate. It’s unfair and unbalanced.
Health Insurance Subrogation and Limits. While you may have health insurance, many health insurance plans are entitled to be paid back from what you receive in a third party claim. Examples include government sponsored plans like the State Employees Health Plan, Medicaid and Medicare. When you have a private plan, if your employer crosses state lines they may fall under a federal law called ERISA ,which also allows them to be paid back. Most health plans also have benefit ceilings. This is a provision specifying a “maximum lifetime benefit.” The amount specified is the total amount your insurance company will pay on your behalf over the course of your lifetime. This amount begins accruing the date your policy begins and continues until your policy terminates for any reason. Let’s say you were involved in an extremely bad accident and were admitted to the hospital for a month for your injuries. Your total medical bills were $120,000.00. You paid $20,000.00 of that out of pocket, and the health plan paid the other $100,000.00. Your health plan has a benefit ceiling of $1,000,000.00. Fast forward five years. You now develop cancer and have to undergo numerous rounds of chemo therapy, spend a lot of time in the hospital and have a few surgeries. Your other health problems, from the benign occasional flu to more serious conditions like heart disease, cause the health plan to payout more money. It’s foreseeable that you very well could reach that $1,000,000.00 benefit ceiling. If you are only allowed to recoup $20,000.00 from that $120,000.00 in medical bills from the accident under HB 542, you have now lost $100,000.00 in insurance benefits that you have paid monthly premiums for, all because of the negligent actions of someone else. You will never be compensated for this loss under HB 542.
HB 542 is unfair. You are one of the many responsible Americans who have gone out purchased health insurance. Each month, you pay good money for that health insurance benefit. We are all required to also pay good money for car insurance. The law requires this so in the event we hit somebody and injure them, that car insurance will be there to compensate that person for their losses. Why then, should that car insurance company get to profit from the money you pay for your own health insurance? The car insurance company has been collecting premiums from the defendant for the car insurance policy meant to cover the very same medical expenses as your health insurance. The wrongdoers and those who hedge their bets with them should not profit on the backs of the innocent victims. This is one of the reasons why many of us have begun calling HB 542 the “Insurance Company Bailout Bill.” It will allow the liability insurers to continue collecting premiums from the negligent wrongdoers, but will entitle them to have to pay out less when the risk they contracted for occurs. This will result in higher profits for the multi-billion dollar Wall Street industry, all at the expense of fair compensation for the working class North Carolinian.
I hope this helps clear up the confusion. If not, let me know. And, as always, I welcome any questions any of my readers have about the topics in this blog.
Disclaimer: The views of the author are his own. This blog post is not intended to convey any specific legal advice upon any specific individual. Part of the question and answer were edited for publishing on this blog for sake of clarity and space constraints. The author’s wife gets upset when he answers her questions with, “huh?” The author does not understand why. She claims the author is not listening to her. The author maintains that is false, the author just did not hear her over the television volume. Hearing and listening are different, therefore she needs to speak louder. While the author is normally good at crafting successful arguments, he has found this one fails more times than not. Luckily, the author has a comfortable couch. The author hopes he does not upset any of his readers with the answers to their questions. Of course, the author’s response will probably not be “huh?”