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Federal Health Care Law May Reduce or Eliminate Future Medical Expense Tort Damages

By H. Thomas Watson
August 30, 2011

The mandatory health insurance requirement of the Patient Protection and Affordable Care Act of 2010 (PPAC) should significantly reduce the amount of tort damages recoverable for medical expenses. How?

First, under the doctrine of avoidable consequences, tort plaintiffs' damages should be limited to the lower “negotiated rates” for medical services that health care providers agree to accept from health care insurers, rather than the higher “billed rates” charged to uninsured patients for such services. Second, because the PPAC makes health insurance mandatory for everyone, it undermines the rationale historically used for application of the collateral source rule to medical expenses covered by insurance. As a result, defendants should seek to set off amounts paid by mandatory health insurance against any damages awarded for these same services.

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