This is the second post in a series about NC laws limiting individual rights, and the favor shown to insurance companies by our elected officials. Click here for part one.
As introduced in last week's post, the "billed v. paid" legislation passed by the NC General Assembly significantly impacts the rights of injured individuals to receive just compensation for injuries and damages incurred as a result of an accident. To further illustrate the effects of this law, let's consider two cases:
Meet Sandy. Sandy is a hard-working small business owner who has responsibly paid for health insurance her entire adult life, seeing the costs rise each year. She pays $1,300 per month for her health insurance premiums, totaling $78,000 over the course of the past five years.
Sandy was involved in a car accident in which she was hit head-on by a habitually offending drunk driver. Sandy incurred $100,000 in medical bills for the various surgeries required for her recovery. Her health insurance paid for her medical treatment, although she was responsible for her 20% co-pay of the bill. So, if you consider her insurance premiums over the past five years and her portion of the medical bills, Sandy has paid nearly $100,000 "out-of-pocket".
Due to the discount agreements that her health insurance has arranged with medical providers, health insurance only had to pay $20,000 to satisfy their portion of the bill, with the remainder being written-off by the providers. At trial, due to the "billed v. paid" legislation, Sandy is only able to tell the jury about $40,000 of her medical bills (the 20% that she paid, plus the amount paid by her health insurance company). The jury decides on an award of $80,000, meaning $40,000 for pain, suffering, permanency and scarring. The drunk-driving defendant (and his insurance company) gets the benefit of Sandy's wise choice to pay for health insurance all those years and is ultimately responsible for less than the original amount of the medical bills.
Meet Bill. Bill has never worked a day in his life and has never paid a penny toward health insurance. For the purpose of this hypothetical, assume that Bill was involved in an accident identical to Sandy's accident in the previous case. He receives the same medical care and recovery.
At the time of his trial, Bill still has $100,000 due to his doctors, as he hasn't made any payments towards his bills. The jury in this case hears nothing about the "billed v. paid" law, only about the injuries he suffered, surgeries required and bills now due. The jury awards him$200,000because of the magnitude of his bills and the harm they reflect. In Bill’s case, the drunk-driving defendant is forced to answer for the true measure of his crime. This is how the law used to be applied for everyone. Even though Bill's choice to be uninsured was unwise, the defendant was still responsible for the full measure of the “harm” he caused. Bill walked away with a significantly higher award than Sandy.
These scenarios play out in our great state every day since this law has been in effect. Legitimate claims are being denied and delayed and insurance companies are forcing plaintiffs to file lawsuits in record numbers in hopes that a jury will be fair in evaluating their claim.
"Billed v. paid" is definitely good for insurance companies; however, it’s very bad for the individual citizens of the state. My family has been in North Carolina for many generations; some of my ancestors even served as legislators. They served because they wanted to fulfill their public duty for the citizens. Laws are supposed to be created and passed for the good of the people, and this one sadly misses the mark.
Dré Fleury is the Personal Injury Practice Group Leader at Crumley Roberts. His passion for individual rights drives his work every day. He leads a team of personal injury attorneys and case managers throughout the state who work hard to stand up for their client.Free Initial Consultation