It’s not good. In its decision in Howell v. Hamilton Meats (2011), the Court says if you’re injured in an accident, the insurance industry can harvest the economic protection you paid for when you purchased a health care plan. How large is the harvest, you ask? The answer is shocking.

According to the law firm representing Hamilton Meats in Court, the answer is: $10 billion. “The firm … delivered the insurance industry a $10,000,000,000 + per year victory” (2016).

The 10 billion is the difference between the value of the medical services provided and the steeply discounted amount doctors and hospitals are paid under managed care – a system of health care financing that doctors and hospitals regret, you pay for, and Wall Street absolutely loves.

The Department of Health Care Services, for example, pays Marin General Hospital $146.79 for two MRIs costing $6,156.00. Steep discounting such as this is pertinent to Ms. Howell’s case – and to you.

The Howell case

Let’s examine the circumstances of the case. Ms. Rebecca Howell purchases the right to receive managed health care benefits. Carelessly, Hamilton Meats’ employee injures Ms. Howell in a car accident. Her medical expenses are $189,978.63. The discount is $130,286.33. After the discount, her medical expenses are $59,692.23.

Ms. Howell demands that Hamilton Meats’ automobile insurance company pay her $189,978.63. Hamilton Meats’ automobile insurance company refuses; it offers her $59,692.23.

Thus, the dispute is over the discount: $130,286.33.

The question presented to the Court

Who gets the $130,286.33? The choices are (1) Ms. Howell’s doctors and hospital, (2) Ms. Howell or (3) Hamilton Meats’ automobile insurance company.

The Court’s answer

The Court gives the entire $130,286.33 to Hamilton Meats’ automobile insurance company. This decision reverses all prior law. It is decided by the highest court in California, but that doesn’t mean the decision is right or even good public policy. Let’s take a look.

Using other people’s money

It is not remarkable that the Court does not give the discount amount to Ms. Howell’s doctors and hospital. They previously signed contracts with her health care plan agreeing to accept the discounted amount as payment in full in exchange for the plan directing more patients to them.

It is remarkable, however, that in delivering this victory to the insurance industry, the Court does not decide in favor of Ms. Howell, knowing that people injured in car accidents have paid huge sums to their health care plans over many years for their own economic protection, for which the automobile insurance industry pays nothing.

The Court’s decision presents like Quantitative Easing – another government relief program which, for the past eight years, has transferred massive sums from ordinary Americans to banks, insurance companies, and other Wall Street financial institutions. If the law firm’s data supports the dollar amount it claims it delivered to the insurance industry, the 10 billion (or even one tenth of it) is a lot of easing.

We live the life we choose

You have the last word. It’s a matter of choice.

Choice #1: I ask you to send this article to your state legislators with a note: “Please read this article. Pass a law that Howell v. Hamilton Meats is void, as though it never existed. I pay for the health care discount every month with my health care plan premiums, and if I am injured I don’t want to give the discount to the company which insures the person who causes my injuries.”

Choice #2: However, if you disagree with me, please send this article to your legislators with this note: “Please read this article. I like Howell v Hamilton Meats. I want it to apply to me. If I’m injured, I want the company which insures the person who injures me to get the health care discount I pay for every month when I pay my health care plan premiums.”

Contact information: http://assembly.ca.gov/assemblymembers; http://senate.ca.gov/senators.

– Robert Eisele

University of Southern California; Tulane University Law School; Former Deputy Prosecuting Attorney (Arizona); Former Assistant Attorney General (Washington State); Mr. Eisele is an attorney licensed to practice law in California, Washington State and Arizona (inactive).