The Coast News Group

Is my personal injury case now worth a lot less?

The California Supreme Court hammered consumers last week. They gave billions of dollars to big business and insurance companies in one fell swoop. What happened?
The issue in the Howell case involved medical bills and expenses caused by wrongdoers — drunk drivers, careless businesses, and those who negligently hurt innocent people.
Should the wrongdoers have to pay the full amount of the medical bills that they caused, or should they get a break and only pay for the lesser amount paid if the injured person has health insurance and the bills are reduced? The court ruled that wrongdoers and their insurance companies only have to pay the lesser amount. Essentially, the court said that wrongdoers get the benefit of an injured person paying thousands of dollars for health insurance, without having to compensate them for paying those premiums all of those years.
Let’s back up a little bit. If you have health insurance, your company negotiates with hospitals, doctors, etc., to pay reduced amounts if you get hurt. For example, if the hospital bill is $10,000, your health insurance company may only have to pay $4,000 because of their bargaining power and negotiations.
You usually pay only a co-pay and deductible. This is a benefit you get for paying for health insurance premiums (which are expensive!). The hospital is willing to accept only $4,000 because they get guaranteed payment, timely payment, more patients, etc.
If you have no health insurance, you’re probably on the hook for the full $10,000. (And, as an aside, you may even have to pay back your health insurance company that $4,000 if you collect it from the wrongdoer, but that would take up a whole separate article!)
What the Howell case said is that wrongdoers now only have to pay the lesser amount that your health insurance company paid in a personal injury case where the wrongdoer caused the medical bills; thus, in our example, instead of having to pay $10,000 (the old law), they now would only have to pay $4,000 (the new law) and not give you any compensation for the thousands and thousands of dollars you spent on health insurance premiums to get these discounts!
But if they hurt someone who doesn’t pay for health insurance premiums, they owe the whole $10,000! Huh? Why does the person who pays health insurance premiums get screwed? Why does the drunk driver or the greedy insurance company get off the hook because you spent thousands of dollars on health insurance premiums?
Clearly, this is a purely political decision to protect big business and big insurance companies. It will save them billions of dollars each year in California on personal injury cases. It makes no sense logically why an uninsured person would get more than someone who pays insurance premiums if they both suffer identical injuries.
But what does this mean for personal injury cases in general? It may greatly reduce their value.
Juries sometimes base their overall verdict on the amount of medical bills a person incurs. They, by law, are asked to award money for pain, suffering, disability, and other esoteric losses. Many times, juries will use a multiplier to calculate these damages; two to five times the medical bills for these “general” damages is a formula often bandied about in court.
So, if the allowable medical bills are greatly reduced under the Howell decision, it follows that a victim’s overall award may also be significantly less as well.
Now, more than ever, it’s important to retain an experienced trial lawyer if you’ve been hurt and have a potential personal injury case.
The California Supreme Court certainly isn’t looking out for the consumer. Maybe a top-notch trial lawyer can help to even the playing field.