Right now, with the health insurance mandate going into effect at the end of March health insurance is a topic on the minds of many Americans. For most people, insurance is a boon, helping pay for procedures that might otherwise be too expensive. But for individuals involved in personal injury suits, things have become quite a bit more complicated recently.

According to Michael Alder, founder of AlderLaw, P.C., a California plaintiff’s trial law firm, Howell v. Hamilton was “a bomb that went off. It changed the landscape of personal injury cases in California. You can’t overstate the effect it had on personal injury cases in the state.”

Before Howell, he explains, if you had medical bills of a certain amount, that amount was admissible, whether the bills were paid or not. What the case did was disallow the admissibility of what was billed and only allowed what was paid. Because jurors anchor pain and suffering awards on the amount of the medical bills, the result was lower pain and suffering awards.

In other words, if you have $1 million doctor’s bill and insurance pays $100,000 of that, before Howell, you could admit the million. Now, you can only admit the $100,000. “This resulted in a multi-billion dollar boon to the insurance industry,” Alder explained. “It arbitrarily states reasonable value for medical bills, discounting premiums over a lifetime.” After all, if you pay a premium for dozens of years, you don’t get to admit that. Now, if you are uninsured, you can admit the full amount so, if there are two identical plaintiffs, one insured and one uninsured, the uninsured (viewed by society, perhaps, as less responsible) will get more money.

This has led to an increased focus on medical liens. “Liens have been around forever,” Alder explains. “They are a great service for people who don’t have insurance. They can cover a certain procedure or insurance-denied surgery that someone needs.”

Before Howell, they were a common practice when someone needed surgery but did not have the resources. They would take the lien and wait until the resolution of the case to get paid. Howell, though, made them even more attractive, as the lien numbers are billed but not paid until the end of the case, so you can submit the full amount of the lien bill. The downside, though, is that the defense in a case will scream that all the bills are on liens, that the medical care is dictated by lawyers, that the surgery is not needed. This resonates with jurors, and can make cases with liens harder to try.


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