A bill that would only allow an injured plaintiff to recoup the medical bills that are paid by an insurer was debated and approved in a special order of business on Tuesday (Jan. 28) in the House Judiciary Committee. HB 1204 was introduced by Rep. Jon Eubanks, R-Paris.
Under the current system, a plaintiff can seek the full amount charged by a medical provider even if the insurance company negotiates a lesser amount to be paid. Plaintiffs can also seek to have medical insurance premiums paid.
Eubanks admitted the bill would lower the amount of money awarded to injured victims, but this type of tort reform is needed to help align medical insurance costs. Tort costs, as a whole, not just related to medical lawsuits, impact the average household in Arkansas by about $2,900 per year, he said.
“It’s common sense. It’s black and white,” Eubanks said.
He faced vigorous opposition from committee members. Rep. Ashley Hudson, D-Little Rock, noted the bill would create different classes of people based on whether they have insurance or what type of insurance they have. For instance, if two people had the same injury and it cost $10,000 to cover the expenses, someone with insurance might only be able to seek $5,000 if the company negotiated the payment down with the provider. The other person who doesn’t have insurance could seek the full $10,000.
Rep. Jimmy Gazaway, R-Paragould, asked Eubanks and attorney Justin Allen, who testified for the bill, how this will impact citizens in the state.
“How will this impact the average Arkansan who pays their health insurance?” he said. “I (as a plaintiff seeking compensation for injuries) should be able to present the whole bill (medical).”
Gazaway also noted the bill would inevitably redefine how evidence is presented in the court cases. The legal standard in the state has been that the legislature cannot dictate procedures in a courtroom, he said.
Neither Eubanks nor Allen could tell the committee if it would or could reduce costs for those insured. Eubanks also said he’s not sure how much positive impact it would have on the overall tort costs for the average person in the state.
Saline County attorney and former insurance adjuster Justin Minton said the bill would have effects on other parts of monetary settlements. Enacting it would be akin to installing “marxist price controls,” he said.
Other aspects of a lawsuit such as pain and suffering are not covered by the bill, but insurance companies use multipliers to determine how much they are willing to pay for things like pain and suffering and those would inevitably go down, he said.
The bill passed out of the committee on a voice vote and will be considered next by the full House chamber.
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Clinton Mora is a reporter for Trending Insurance News. He has previously worked for the Forbes. As a contributor to Trending Insurance News, Clinton covers emerging a wide range of property and casualty insurance related stories.