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Did the Affordable Care Act End the Collateral Source Rule?

By Spencer A. Bomar

The Affordable Care Act has the potential to change dramatically many aspects of America's healthcare system, including access to medical care, insurance coverage for medical expenses, and the actual costs of care. As a side effect, there is a growing belief that the passage of the Affordable Care Act could signal the end of the collateral source rule.

With the enactment of the individual mandate, it may be time to question the premise underlying the collateral source rule: namely, that people need incentives to acquire health insurance and that admitting evidence of collateral source benefits creates a windfall for the alleged tortfeasor. Similarly, there is evidence that the Affordable Care Act may result in the “incurred costs” for healthcare services reflecting the actual costs, and not negotiated rates.

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