presented by the Health Care Department

Score One for the Defense: Application of the Affordable Care Act to Reduce Future Damages

By Leslie M. Jenny, Esq.

Medical malpractice and catastrophic injury lawyers, insurers and clients are all interested in the first cases to come to fruition following the rollout of the Affordable Care Act (ACA). The ACA represents our nation’s first piece of federal legislation mandating universal access to health care. Before the ACA, it was speculative as to whether an injured individual would have health insurance coverage in the future. Prior to the ACA, in most, if not all, jurisdictions, the collateral source rule was an impediment to achieving a reduction of future damages based on the availability of insurance benefits. The theory behind the collateral source rule being that a tortfeasor should not receive a reduction in damages based on the availability of negotiated benefits.

Historically, plaintiffs’ attorneys have been permitted to put on essentially unrebutted evidence projecting the cost of a plaintiff’s medical expenses in the future. Many times this has been accomplished by the use of life care plans. Life care plans are the single largest component of every medical malpractice or catastrophic loss case, and they generally project massive expenses that can drive equally massive jury verdicts.

Since the implementation of the ACA, along with its mandate that all Americans obtain health insurance coverage or face penalties, interested parties are watching as rulings in the first cases roll out of the trial courts. One such case, with a ruling and written opinion relating to the applicability of the ACA to a reduction in future damages, recently resulted in a massive reduction in the cost of funding a life care plan. The Journal Entry and Order in the case of Jones v. MetroHealth, Case No.757131, by Judge Ronald Suster in the Cuyahoga County Court of Common Pleas (Cleveland, Ohio), a birth injury case tried to verdict in 2014 by Marshall Dennehey, is a victory for the defense.

In an evidentiary hearing relating to the application of caps and potential set-offs on past and future medical expenses, the court found that the application of the ACA would be taken into account. The plaintiff had advanced an $8 million life care plan. Experts in elder law, life care planning and nursing established, through their testimony, that the premium for health insurance pursuant to the ACA is between $2,000 and $8,000 per year, and that the maximum out-of-pocket expense is between $6,300 and $6,500 per year. The court utilized these basic parameters in order to reduce the cost of the life care plan introduced at trial. The verdict returned by the jury was $14.5 million. The total reduction taken by the trial court was $11 million ($4.5 million reduction relating to caps, $500,000 reduction relating to past medical expenses and the remainder relating to reductions of future medical expenses).  

Key take-aways relating to the application of the ACA in the Jones case:

  • Get ahead of the curve with retention of experts and analysis of the details of the life care plan advanced by the plaintiff.
  • Consider retaining an elder law attorney and/or insurance specialist who can assist you in establishing the costs of health insurance coverage, the benefits provided by alternate policies and the maximum out-of-pocket expenditures.
  • Retain a life care planner who can break apart the plaintiff’s life care plan and identify which elements are covered by the ACA.
  • Consider retaining an expert to establish the cost of an annuity to cover the cost of your reduced life care plan expense.
  • Analyze the benefit of potentially requesting a bifurcated trial in terms of liability and damages. A bifurcated trial may eliminate arguments of prejudicial effect that are often advanced by plaintiffs
  • on these issue and may result in a tribunal more willing to entertain evidence on the ACA.


The trial court ruling in Jones represents one stone on the path paving the way to acceptance of defense evidence relating to the ACA in medical malpractice and catastrophic injury cases.

This Law Alert has been prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects.

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