Protecting Your Health Insurance Benefits from Those Who Would Give Them Away

If you become paralyzed by a drunk driver, who should get the benefit of your responsible decision to pay health insurance premiums every month? You or the drunk driver?

Under current state law, whether you or the drunk driver gets the benefit of your health insurance is decided by a jury. But if a bill working its way through the General Assembly becomes law, the drunk driver will get it automatically.

In particular, I’m writing about Senate Bill 847, which would abrogate the collateral source rule. In short, the collateral source rule prevents defendants from introducing evidence at a trial that a third-party has paid part of the damages suffered by the person who was injured. In most cases, that third-party is an insurance company that only pays part of the damages because the person injured paid premiums.

It’s a legal doctrine nearly as old as our state. In 1854, in a case called The Proper Monticello v. Mollison, the United States Supreme Court explained that this rule prohibiting wrong-doers from benefiting from their victims foresight was already “well-established” in American law.

Courts have described the collateral source rule to have three purposes. First, it ensures that a wrongdoer does not benefit from their victim’s foresight to purchase insurance. Second, it supports the deterrent purposes of tort law by requiring the wrongdoer to pay the full extent of the damages he caused. And third, if there’s threat of a “windfall” between a wrongdoer and his victim, the wrongdoer should never be the beneficiary.

These purposes relate directly to personal responsibility. We are each responsible for our own lives. We are responsible for the good decisions that we make – and should be able to benefit from them. And we are responsible for the harm that we cause – and should be required to make good for it.

If you work and are responsible, you pay health insurance premiums every month. In 2010, the last year for which I could find data, the average annual health insurance costs for Missouri families with private health insurance was $13,903 per year. With Obamacare, that price is only going up.

What do you get for those monthly payments? First, your money purchases the certainty that a medical calamity will not bankrupt you. Rather than being forced to pay for your medical care out-of-pocket, you pay an insurance company to reduce your out-of-pocket costs. If you use less than your premium payments, you don’t get your premiums back but at least you’ve had the certainty all year that an illness will not bankrupt you. If you use more, you get the certainty, and actually spend less through premiums than you would have if you did not have insurance.

I believe you should be able to keep the benefits you’ve paid for and that government should not take any action to give those benefits to someone else. And under current law, our civil justice system ensures that people who harm others intentionally or through reckless behavior are held personally accountable for their behavior through monetary damages.

Do not be mistaken, defendants found liable in civil lawsuits have done something wrong. Every successful lawsuit involving physical injuries to the victim involves a conscious and deliberate choice by the defendant to violate a community safety rule. There are no exceptions. Though most defendants do not directly intend the result of their actions, i.e. injury to the plaintiffs, to be liable, each and every civil defendant must have, at some point, made a conscious and deliberate choice to engage in an action that violates safety rule designed to protect you and I and everyone else in our state.

For example, we have traffic rules designed to protect the safety of everyone traveling on our roads and highways. We have laws against following too closely, running red lights, speeding, and drunk driving. When someone violates these community safety rules and injures someone else, the wrongdoer is responsible for the harm they cause.

For over 160 years in this state, the collateral source rule has ensured that juries of ordinary Missourians can hold wrongdoers fully responsible for the harm they cause. Unlike “pure” collateral source states, defendants in Missouri can present evidence of the amount of medical bills paid. The jury also sees the original bills. Then it’s up to you – the jury – to decide the true measure of damages.

Unfortunately, personal responsibility is a value that politicians often preach, but don’t always vote that way. The most prominent recent example involving health insurance is Obamacare, which involved an overt transfer of benefits from those responsible enough to purchase health insurance and gave it to the uninsured. If you have a “Cadillac” health care plan, Obamacare taxes it and uses the proceeds to benefit the uninsured. Obamacare also creates an incentive for people not to buy health insurance when they’re healthy. With its rules on guaranteed issue, a person can choose to forego health insurance until they know they’re going to have high health costs. These free-riders take advantage of those of us responsible enough to pay our premiums every month.

Senate Bill 847 shares features of Obamacare, except, instead of giving the benefits of your health insurance policy to the uninsured, it gives them to drunk-drivers, red-light runners, and other people whose negligent acts have harmed someone else.

Neither the plaintiffs’ health insurance nor the defendants’ liability insurance are relevant to the measure of damages caused by the defendants’ wrong-doing. The abrogation of the collateral source rule operates as little more than a perverse reverse socialism. One leading advocate of pro-insurance company tort reform measures has even admitted that proposals like SB 847 “operate as wealth-transfers to tortfeasors.” That’s because this so-called “reform” takes money and resources away from responsible middle-class Missourians who pay their health insurance premiums every month and gives the benefit of those premiums to wrong-doers and their insurers.

Those wrong-doers range from those who have done the mundane – following too closely – to drunk drivers and far worse.  Others may side with drunk drivers and their insurance companies. But if this bill comes up for a vote, I’ll stand with those Missourians who were responsible enough to buy health insurance.