By Daniel J. Alvarez, J.D., Vice President & General Counsel
As has been well publicized, it was revealed last week on healthcare.gov that fewer than 27,000 people signed up for private health insurance last month in the 36 states relying on a problem-filled federal website. States running their own enrollment systems signed up more than 79,000, for a total enrollment of just over 100,000.
Even more concerning then the technological challenges with the system, is whether consumers have the necessary knowledge of health insurance to be making these decisions by January 1, 2014. According to poll results released in August 2013 by the American Institute of CPAs, more than half of Americans are not equipped with the rudimentary knowledge of health insurance concepts and definitions to understand the basics of health insurance plans. http://www.aicpa.org/press/pressreleases/2013/pages/us-adults-fail-health-insurance-101-aicpa-survey.aspx
Findings of the poll include the following:
- 51 percent of adults surveyed could not accurately identify at least one of the three most common health insurance terms present in insurance contracts: premium, deductible, or copay.
- 34 percent thought a premium was an expense at the time of receiving medical service or a prescription.
- 27 percent thought a copay was the cost of obtaining insurance.
- 12 percent did not know a deductible is the money one pays before an insurance company makes payments.
- 41 percent of those surveyed were not knowledgeable about the ACA.
- 48 percent of young adults ages 18 to 34 having no knowledge of the change in health care laws.
For personal injury victims, an accurate understanding of these issues is even more critical as they attempt to make insurance coverage decisions that will affect them for the rest of their lives. For example, the question as to whether it is better to enter the exchanges versus using planning techniques to remain eligible for public benefits need to be thought through and addressed. The impact of the ACA on personal injury victims could be dramatic from not only a planning perspective, but also in terms of limiting future damages. It has been argued by legal commentators that future medical damages will be limited in lawsuits to the cost of providing health insurance through the exchanges. Time will tell whether the collateral source rules will be altered once the ACA’s coverage is in place for a period of time. See http://college.holycross.edu/RePEc/hcx/Matheson-Congdon_ACATortAwards.pdf
When navigating the transition from litigation into life, plaintiffs must seek out a knowledgeable partner to assist in making these complex determinations. At Synergy, we have worked with plaintiffs for years in navigating the intersection of public benefits, private insurance and settlement planning. We will continue to be closely tracking the implementation of the ACA and its impact on settlement planning.