Perhaps no issue has generated as much confusion recently among trial lawyers and judges than the question of what evidence may be submitted to a jury regarding a plaintiff’s medical bills in a personal injury case and under what circumstances a judge may reduce a jury award to take into account the amount of medical bills actually paid by the plaintiff’s health insurer. Fortunately, it appears that the California Supreme Court is about to enter the discussion and (hopefully) clarify the law.

Generally speaking, the defendant is liable for all of the harm that it has caused, regardless of whether the plaintiff is fortunate enough to have his own insurance that has covered some of the losses. The collateral source rule precludes any evidence of the fact that the plaintiff has other insurance or the payments made through that insurance.

As we all know, health insurers and government providers (such as Medi-Cal) never pay the “full price” for medical care. There are always dramatic reductions that have been negotiated ahead of time. If the actual hospital bill incurred by an injured plaintiff is $1,000,000, the health insurer may end up only paying $100,000. The question then becomes, which of those numbers represents the proper measure of damages for medical expenses. What the debate centers on is whether the $900,000 savings is a benefit that the plaintiff purchased with his health insurance premiums and ought to benefit from in his personal injury case or whether awarding the plaintiff the full $1,000,000 would represent an unwarranted windfall. [Read Full Article]