The New York Appellate Division recently addressed whether health insurance available under the Affordable Care Act could offset the costs of an award for future medical expenses in personal injury lawsuits. In Liciaga v New York City Tr. Auth., the Court concluded that the defendant should have the opportunity to raise the issue at a collateral source hearing, potentially allowing the defendants to reduce future medical expenses awards. An offset in a catastrophic injury case can be a game changer. In Liciaga, a reduction of $3.75 million was on the line.
The plaintiff in Liciaga sustained severe injuries that required significant future medical care, and a Kings County jury awarded $40 million for the plaintiff’s future medical expenses. Post-verdict, the defendant argued that since the ACA guarantees access to health insurance for individuals with preexisting conditions, the plaintiff could secure a policy to reduce his future medical costs substantially.
The Appellate Division agreed with the defendant’s argument. The Court concluded that the defendant showed that this insurance would reduce future medical costs by millions, satisfying the CPLR 4545 standard that offsets should be applied when reasonably certain collateral sources could cover future costs. The Court held as such even though the plaintiff did not have the coverage. Stating that the plaintiff had a duty to mitigate damages, the Court concluded that the duty included obtaining insurance to offset medical costs when such coverage was reasonably available.
To be clear, the Court did not conclude that the defendant was entitled to the offset. Because the trial court had denied the defendant’s request to hold a collateral source hearing, the Appellate Division remitted the matter to the trial court to hold a hearing on the issue of future medical expenses and a determination as to any collateral source offsets to which the defendant may be entitled.
The Liciaga decision is important for post-judgment litigation and can reduce a future medical expense award by several thousands or millions of dollars.
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