Proposed Legislation to Ensure All Accident Victims Compensated EquallyUp until recently, Californians injured in motor vehicle or other kinds of accidents due to the negligence of others were entitled to compensation for their medical bills, as well as pain and suffering associated with the injury, under a collateral source rule. However, an August 2011 California Supreme Court decision concerning whether the possession of health insurance at the time of the accident could influence the damages collected by the victim effectively penalized the insured in the state by depriving them of compensation to which they has previously been entitled, thereby discriminating against this segment of the population.
“The decision has proven extremely detrimental to insured accident victims,” said California personal injury lawyer James Ballidis.
In the case that led to this pivotal Supreme Court decision, the plaintiff, Rebecca Howell, had sustained injuries in a traffic accident with a truck that was owned and operated by Hamilton Meats & Provisions Inc. While at trial the company accepted liability for the crash, it contested the amount of compensation it was obligated to pay Howell for medical bills and pain and suffering. Although Howell had incurred nearly $200,000 in medical expenses, the defendant asserted that its financial obligation should not surpass the negotiated amount paid by Howell’s health insurer to medical providers, which was approximately $70,000. The trial court ultimately awarded the plaintiff the lesser amount. The Court of Appeal reversed this decision, and the case was sent to the Supreme Court, where the defense prevailed.
Limiting the damages to which insured accident victims are entitled for medical bills reduces not only their compensation for economic loss but also for pain and suffering, as the negotiated amount paid by health insurers to service providers is used to determine the latter. Selectively discriminating against insured Californians involved in accidents in effect penalizes them for having health insurance. In return for paying insurance premiums for years, victims are rewarded with reduced settlements.
A piece legislation proposed by California Senator Darrell Steinberg last February, SB 1528, would ensure that all injured persons in the state be compensated equally by allowing accident victims to recover compensation for the reasonable value of medical services received, regardless of the amount actually paid for them. Hopefully, the bill will garner the approval of lawmakers.
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