In 2016, I noted that “while the Affordable Care Act aimed to make health insurance more affordable, “recent market developments and projected rate increases for upcoming renewals present challenges to using ACA policies as a means to mitigate damages during settlement negotiations.” Affordable Care Act Blog August 22, 2016
Less than a decade later, the political climate continues to validate my cautious assessment of the challenges of the strategy..
Claims and Litigation Management Suggested Use of ACA to Mitigate Damages in Your Personal Injury Case at Mediation
“Even before trial, the availability of insurance through the ACA may be more effectively raised in settlement discussions. Defendants should prepare multiple cost scenarios, including the annuity cost of the plaintiff’s life care plan, the annuity cost of the plaintiff’s life care plan with insurance, the annuity cost of the defendant’s life care plan, the annuity cost of the defendant’s life care plan with insurance, and the annuity cost of the plaintiff’s life care plan utilizing the proper paid rates for the medical goods and services identified in the life care plan. Additional savings can be realized on these annuitized cost projections by utilizing medical underwriting. The structured settlement consultant will ascertain rated ages from the life insurance carriers. From these analyses, you can then work with your defense team and annuity broker to develop settlement options. The guaranteed income tax free annuities that are used to fund the structured settlements add a protective layer to the plaintiff knowing that they cannotoutlive their settlement. Those options can include utilizing special needs trusts and Medicare Set Asides as further vehicles to provide for a plaintiff’s future needs at more realistic values. In the end, the goal is to demonstrate to plaintiff, utilizing all available insurance and public benefit options, how their medical care can be maximized using the amounts being offered in settlement” [ Source: CLM 2016 Orlando Florida]
The CLM piece argued in 2016 that the ACA is here to stay having survived multiple high court challenges and the longevity of insurers. [ Poignant comment.. How is that working out in late 2025?]
Impact of ACA Policy Rate Increases on Use in Settlements
I observed that settlement offers which trade the cost of future medical care for a structured settlement that pays for an ACA compliant medical insurance policy do not completely solve the problem for the following reasons:
- Uncertainty of continued insurer participation in the marketplace. Several major health insurers are leaving exchanges. These include big names such as AETNA United Healthcare and Humana.
- Uncertainty of cost of premiums. Without premium rate stability it is impossible to accurately fund medical insurance premiums with a structure. One will often come up short. If you have a structured settlement that pays $600 /month with a 3% COLA and then premiums go up by 10%, I asked ” where does that leave you?” Then run that deficit out 10 years or longer, perhaps to where we are today. The Milwaukee Journal Sentinel reported August 21 2016 that proposed increases could range from 5.44% to 37.88% statewide, according to filings with the federal government. In Milwaukee County, the smallest proposed increase is 9.06%. Some will be eligible for subsidies, but those ineligible for the subsidies are facing increases of 20% or more!
Subsidies, in the form of credits, are available to people with incomes up to $47,520 for one person and $97,200 for a family of four. The subsidies scale back for those with incomes close to the thresholds. How about today? See Some Americans are getting sticker shock as they shop for ACA insurance, a November 3, 2025 CBC News report by Aimee Picchi “the average premium for a mid-level insurance plan surging 26% this year.
Why are premiums on ACA policies rising so much?]
The market is smaller than projected, I wrote, in 2016. The people who have bought health plans overall are sicker than predicted. And health insurers have incurred larger losses than anticipated. Health care costs continue to rise. Fast forward to 2025 and a deeper and more indelible underscore to the question of How About Now?
In my November 10, 2011 blog commentary Making a Settlement Offer in the Form of a Supplemental Needs Trust – Structured Settlements 4Real® Blog, I made the contemporaneous observation that “sometimes defendants make offers combining structured settlement and supplemental needs trust (or special needs trusts). While there is nothing inherently wrong in making an offer in this manner (the defense can make a settlement offer in whatever form it likes), and the strategy may prove beneficial on a case by case basis, the question is, can a defendant “force” a supplemental needs trust (or an ACA Plan or an HMO) on an adult plaintiff with whom the defendant is in litigation where there is good liability for the plaintiff?
Staten Island NY Obstetric malpractice case
GIVENTER v. REMENTERIA 184 Misc.2d 744 (2000) 705 N.Y.S.2d 863 Full caption” EVAN GIVENTER, an Infant, by His Mother and Natural Guardian, DONNA GIVENTER, et al., Plaintiffs, v. JOSE L. REMENTERIA et al., Defendants. Supreme Court, Richmond County (February 18, 2000) .
In a medical malpractice action, the jury awarded the plaintiffs, a severely brain damaged child and his parents, a verdict of $53,735,955.The defendant doctor and hospital have petitioned this court, pursuant to CPLR 4545 (a), to reduce the amount of that award by applying collateral sources to pay for the future cost of medical care and therapies (rehabilitative services) to be received by the child.The defendants seek to apply the mother’s employee health insurance plan and the benefits received while the child is in school pursuant to the Federal Individuals with Disabilities Education Act (IDEA) to offset the financial burden placed upon the defendants by the large jury award.They also seek to have the plaintiffs enroll in a managed health care plan (HMO) where the defendants would pay the premiums.
In rejecting the HMO argument, the Giventer court reasoned that insurance which the plaintiffs do not have can never be reasonably certain to replace what the jury awarded and cannot be considered a collateral source offset.
“The defendants also suggest that the infant plaintiff can purchase his own health insurance in order to provide them with a collateral source offset. Mr. Pessalano, the defendant’s rehabilitation expert who testified at the collateral source hearing, stated that Evan Giventer could purchase insurance through Blue Cross of New Jersey for $3,000 to $3,500 per year, which after a one-year waiting period would pay out literally hundreds of thousands of dollars per year for Evan’s extensive nursing care. However, when cross-examined on this point, Mr. Pessalano’s testimony was vague and speculative. He responded that: “[i]t would pay for a significant amount” but that he could not say how much without seeing a policy. When asked if he could provide a copy of such a plan, he responded that he did not have one.
The defendants also suggest that Evan be required to become a member of a managed health care plan, an HMO. Evan currently lives at home with his family. It was never proven to this court that any insurance company would approve home nursing care as opposed to care in a residential institution. No one testified as to what level of care an insurance company would permit. The jury’s awards will permit Evan and his parents to obtain the care that they choose, from doctors and nurses of their choice, without any limitations such as preapproval or being on a list for treatment or any other constraints which accompany managed care. An HMO would not replace what the jury awarded and cannot give rise to a collateral source offset. Nor can the infant plaintiff or his guardians be required to join an HMO which may or may not accept Evan and his preexisting condition”. (Emphasis ours)
Since Giventer many questions have arisen
- Have healthcare insurance policies become more liberal or more restrictive?
- How restrictice are they likely to be in the future?
- Is it possible to predict the increase in premiums on these policies?
- What will be the impact of low interest rates on health insurers (during periods of low interest rates)
- Are more companies entering the long term care insurance market, or leaving it?
There are many benefits to a Supplemental Needs Trust, but there also many restrictions and /or limitations.
A New York Defense Perspective in October 2024
“The Appellate Division, Second Department recently encountered a question of first impression regarding the interplay between the ACA and CPLR: “whether a defendant may be entitled to a collateral source hearing pursuant to CPLR 4545 for the purpose of establishing that an uninsured plaintiff’s future medical expenses will, with reasonable certainty, be covered in part by a private health insurance policy, as long as the plaintiff takes the steps necessary to procure the policy.”i
In Liciaga v. New York City Transit Authority, N.Y. Slip Op. 04257 (2d Dep’t August 21, 2024), the plaintiff sought to recover damages for injuries he sustained while conducting a track replacement project on an elevated subway line. The defendants were found negligent and the case proceeded to a trial on damages where the plaintiff was awarded, among other things, $40 million for future medical expenses. The defendants moved to set aside the verdict or, in the alternative, for a collateral source hearing on the issue of future medical expenses. The trial court denied the defendants’ motion and the defendants appealed.
Citing Nunez v. City of New York, 85 A.D.3d 885, 887¬–88 (2d Dep’t 2011… “To be entitled to a collateral source hearing, a defendant “must [merely] tender some competent evidence from available sources that the plaintiff’s economic losses may in the past have been, or may in the future be, replaced, or the plaintiff indemnified, from collateral sources.” The defendants in Liciaga argued that they were entitled to a collateral source offset because, though the plaintiff was uninsured at the time of his accident, he was eligible for insurance coverage through the ACA”.
The court relied on the plaintiff’s common law obligation to mitigate damages and the “minimum essential coverage” mandate under the ACA as further support for its conclusion.
See Second Department: Defendants Are Entitled to Collateral Source Hearing for “To-Be Obtained” Insurance Coverage Under the ACA | Barclay Damon October 17, 2024
Even if You Can Jump, there is the Question of ” How High?”
It’s not particularly credible to simply say you can buy a health insurance policy without thoughtful consideration and analysis of items such as:
1. Premiums. The ability to pay premiums however high they go. If you can’t afford the premium or lack the resources to do so that isn’t very helpful. Annual premium inflation is one issue. Mitigation through using a structure is helpful to a degree.. Premium increases generally exceed the fixed COLAs available with structured settlement annuities, Indexed linkedin options may help to a degree but there needs to be a New York admitted company that both has indexing from from the start and and does not terminate when benefits start. Pacific Life hopes to introduce a solution that may be helpful in 2026.
2. Lack of competition on pricing in many states for the most comprehensive of coverage
2. The continued availibilty of subsidies and the ability to qualify for the subsidies.
3. Coverages, Exclusions and Utilization Review
4. Benefit caps, both for certain types of treatments and aggregate5
The Senate deal allows for a December 2025 vote on whether to extend ACA subsidies The outcome will determine if Obamacare coverage remains affordable for millions of Americans.
Is Obamacare ending? What government shutdown deal means for health care Newsweek November 10, 2025
“the shutdown deal temporarily reopens the government, but the long-term fate of Obamacare subsidies is unresolved“
.Last updated November 14, 2025
