How are future medical costs calculated in a US injury case?
A life-care planner itemizes all future medical needs and their annual costs, then an economist reduces the total to present value using a net discount rate (usually 2-4%). The award is the lump sum that, invested today, would fund all future care over the plaintiff's life expectancy.
What is a life-care plan?
A life-care plan is a comprehensive expert report projecting every future medical and care need: surgeries, medications, therapy, durable medical equipment, home modifications, and attendant care, with costs and replacement schedules. It is the standard evidentiary basis for future medical damages in US courts.
Does health insurance reduce my future medical award?
It depends on the state's collateral source rule. In traditional collateral source states, evidence that insurance will pay is inadmissible and does not reduce the award. Many states have modified this rule by statute, allowing offsets for benefits from collateral sources.
What discount rate is used for future medical costs?
Economists typically apply a net discount rate of 2-4%, reflecting the difference between investment returns and medical cost inflation. A minority of states use the total-offset method, assuming interest and inflation cancel out (0% net rate), which increases the award.
Are future medical damages capped in the US?
Economic damages, including future medical costs, are generally not capped. State damage caps usually apply only to non-economic damages (pain and suffering), most often in medical malpractice cases. Future medical costs are typically fully recoverable with expert proof.