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New Jersey Superior Court Deals Blow to Efforts to Limit Future Medical Costs Based on Application of Affordable Care Act

May 27, 2016

To the frustration of Defense Attorneys throughout the country, courts have routinely used the Collateral Source Rule to preclude evidence that plaintiffs receive of insurance benefits related to the accident at issue.  The general purpose of the Collateral Source is twofold as the Rule 1) ensures the plaintiff receives full compensation; and 2) does not allow a tortfeasor to avoid liability for payments made to the plaintiff due to the fortuitous presence of an insurance policy.  
Historically, New Jersey law has rejected the common incarnation of the Collateral Source Rule that prohibits any evidence of a collateral benefit.  Rather, the New Jersey Collateral Source Rule, N.J.S.A. § 2A:15-97, takes a different approach and permits the introduction of evidence of a duplicate benefit and permits the court to deduct the amount of that benefit from any award to the plaintiff.  Under New Jersey’s Collateral Source Rule, future benefits are only deductible if they can be determined with a reasonable degree of certainty.  
Under this framework, defendants in a recent New Jersey medical malpractice case not handled by Zarwin attorneys, alleging severe neurological injuries and cerebral palsy due to complication during birth, sought to exclude evidence of plaintiff’s future medical expenses on the basis that insurance coverage under the Affordable Care Act constituted a collateral future benefit.  Pannacciulli v. Beloff, 2016 N.J. Super. Unpub. LEXIA179 (2016).  
At the time of trial, the plaintiff had already incurred a medical lien of over $3.2 million.  Plaintiff’s experts estimated that if she lived into her twenties, she would incur an additional $2.3 to $2.5 million in medical expenses.  
The defense sought to reduce the amount of plaintiff’s future medicals based on the argument that these expenses would be covered by insurance under the Affordable Care Act.
In a significant blow to the defense, the New Jersey Superior Court ruled that evidence of insurance under the Affordable Care Act was not admissible to reduce plaintiff’s future medicals expenses because insurance coverage under the Affordable Care Act is not reasonably certain.  
The Court compared insurance under the Affordable Care Act to government benefits, and noted that such benefits are often subject to periodic review and are therefore uncertain.  The court also pointed out that when applying the New Jersey Collateral Source Rule to government benefits, New Jersey Courts only permit evidence of the receipt of government benefits if the benefits are not contingent, speculative, or  subject to change or modification.
Applying these rules, the trial court refused to admit evidence that the plaintiff’s future medical expenses would be covered by insurance under the Affordable Care Act.  The Court noted the uncertainty of insurance under the Affordable Care Act  pointing out that Congress has sought to repeal the Act over fifty times.  Further, the court pointed out that 2016 General Elections also call into question the certainty of the Affordable Care Act.  Accordingly, the court held that in light of the uncertain nature of the Affordable Care Act,  insurance benefits under it were not reasonably certain and therefore not admissible to reduce a plaintiff’s future medical expenses.  

For more information, please contact Ross DiBono at

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