Growth in Health Coverage Under Obamacare Yields Benefits for Accident Victims

Many accident victims must pay out of pocket for medical care while waiting for compensation from the person or company that harmed them. This fact is rarely discussed, but it can represent a real hardship for individuals and families.

The alternative to spending one’s own money to cover medical expenses while recovering from an injury inflicted by another’s negligence or recklessness is to rely on your own health insurance. Thanks in large part to the full implementation of the Affordable Care (ACA) Act in 2013, taking that option has become possible for millions of Americans.

An analysis published in the May 2015 Health Affairs revealed that nearly 17 million U.S. residents gained health coverage over the preceding two years. A majority of these new coverages came through Medicare and Medicaid, but slower growth in policy premiums also played a significant role.

Obamacare, as the package of policies enacted through the ACA is often called, receives much criticism. Whatever the merits of the arguments against the program, the benefit to personal injury victims who first received health insurance under the ACA cannot be overstated. In 2011, AAA estimated the average cost of a car accident involving a serious injury was $68,170, with medical costs, vocational rehabilitation and emergency services making up the lion’s share of the costs.

Victims with quality health insurance of the kind mandated under the ACA can depend on having most, if not all, of those medical expenses paid by their insurer. Even with a relatively high-deductible plan, paying, say, $6,200 out of pocket instead of $62,000 is much less of a burden.

A second, little-noticed benefit of ACA-facilitated coverage is that health insurance companies no longer have the right of subrogation. For the past two decades many types of health insurers that paid for care following an accident but before any other compensation was made could seek reimbursement from the personal injury award. This could mean that an accident victim who incurred $10,000 in medical expenses and received a settlement or judgment from the at-fault party for $12,000 could be asked to return almost all of that settlement or judgment to his health insurer.

The health insurer would not be legally entitled to demand repayment of benefits if there were no third party to sue. But the companies were quick to write victims’ lawyers seeking repayments when they learned a viable negligence claim existed.

Now, there is no subrogation for personal injury recoveries under ACA rules, which can leave victims with more of their compensation. Many Shapiro, Appleton & Duffan personal injury clients have been happy to learn that health insurance claims will not have to repaid. So, yes, this is a major hidden benefit of ACA policies.

EJL