Column: Wrongdoers will reap the benefits of responsible Wisconsin residents

3:31 PM, Mar. 12, 2013  |  Comments
Jeff Pittman
Jeff Pittman
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Each year, Wisconsin residents spend millions of dollars to purchase health insurance to protect their families in the event of a illness or serious injury.

When they are involved in a serious accident caused by the negligent conduct of another, those Wisconsin residents may have their medical bills paid by the health insurance they have obtained through hard work, planning and, in some cases, sacrifice.

In February, Rep. Andre Jacque, Sen. Paul Farrow and Sen. Glen Grothman introduced Senate Bill 22 (SB-22), and Assembly Bill 29 (AB-29), which would completely change Wisconsin's law regarding how juries determine the reasonable value of medical care an injured person receives as the result of an accident. The change overrules the collateral source rule, which has been law in Wisconsin for more than a century, and that was recently unanimously upheld by the Wisconsin Supreme Court.

A change to this rule punishes those who purchase health insurance and benefits drunken drivers and other individuals who injure Wisconsin citizens through negligent conduct. Any change to the law would effectively only benefit the wrongdoer.

Currently, Wisconsin law allows an injured person to recover the reasonable value of medical services required to treat their injuries. The law provides that the value of medical services is presumed to be the amount provided in the medical bill. Evidence of payments by an outside provider, like health insurance, is not allowed for numerous reasons, including that the courts have recognized the sums paid for insurance are in the nature of an investment and should not benefit the person causing the injury and that the health insurer is able to negotiate reductions based on factors unrelated to the actual cost of the services, e.g. volume discounts.

The proposed changes in SB-22 and AB-29 discriminate against responsible people who have planned ahead and purchased health insurance. By allowing health insurance payments into evidence, this means plaintiffs with health insurance could recover less money for their medical care than people without insurance, thus saving the wrongdoer's auto insurance company millions of dollars and helping increase profits, all due to the injured victim's foresight to purchase insurance to protect their family.

An example would be if you're in an accident with a drunken driver who runs a red light and causes injury to three different people (the drunken driver's passenger, your passenger and you) to incur $100,000 in medical bills each. All three of you suffered the same injuries and needed the same medical treatment. However, the drunken driver's passenger is uninsured. Your passenger is a senior citizen on Medicare, and you have United Healthcare through your employer.

Jacque, Farrow and Grothman's proposed law will allow into evidence the fact that your health insurance provider, United Healthcare, paid 80 percent of your bills due to contractual write-offs, and your passenger had Medicare pay 40 percent of their bills. As a result this proposal, the potential recovery for medical bills will likely be: The drunken driver's passenger $100,000 (uninsured); you, $80,000 (United Healthcare); your passenger, $40,000 (Medicare).

Just to recap, the amount of the medical expenses for all three of you were the same ($100,000). Everyone suffered the same injury in the same accident, but because of SB-22 and AB-29, the drunken driver causing the accident will get the benefit of you having United Healthcare and your passenger being covered under Medicare.

Under the current law, the drunken driver must pay the reasonable value of the injuries he caused - $300,000. Under the new proposal, the drunken driver likely only will pay $220,000.

Jacque, Farrow and Grothman also reference that by changing the law, Wisconsin would join Minnesota, Ohio and Indiana, which have adopted similar laws.

So are auto insurance rates lower in those states than Wisconsin? No! According to the Auto Insurance Database Report from the National Association of Insurance Commissioners, Wisconsin ranks sixth ($682.92) on the list of the lowest statewide insurance premiums while Minnesota ranks 15 ($776.96), Ohio ranks 7 ($699.13), and Indiana ranks 10 ($716.66).

If this bill moves forward, it will not give credit to the injured person who has worked hard, planned ahead and made sacrifices to obtain health insurance coverage, disability insurance and other benefits. The injured person would receive less for the same injury than someone who never bothered to buy insurance. It penalizes them for being a responsible person.

We urge you to contact your legislative representative and express your opposition to SB-22 and AB-29. Help explain to them the importance of the collateral source rule.

For more information about the Wisconsin Association for Justice, see WAJ's website, or call 608-257-5741.

Jeffrey A. Pitman is president of the Wisconsin Association for Justice.

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