Line 6 of the record
How Does Georgia’s Collateral Source Rule Work and Does It Prevent a Defendant From Reducing a Damages Award Because the Plaintiff Had Health Insurance?
It still prevents a direct credit: a defendant cannot subtract what your health insurer paid from what it owes. But for causes of action arising on or after April 21, 2025, if you have health insurance, the jury hears both what providers charged and what your insurance contract would require to satisfy those charges, and decides the “reasonable value” of the care (O.C.G.A. § 51-12-1.1). That can lower the medical-expense award without any credit.
The rule before 2025
Georgia’s common-law rule, as the Court of Appeals quoted it in Olariu v. Marrero (2001), “bars the defendant from presenting any evidence as to payments of medical, hospital, disability income, or other expenses of a tortious injury paid for by a plaintiff, governmental entity, or third party and taking credit towards the defendant’s liability in damages for such payments”. In Olariu, a hospital had partially written off a $21,770.42 bill, leaving $1,500 payable by the patient. The court held that the write-off was a collateral source, that the jury could not hear about it, and that the defendant could not use it as a set-off. The court quoted an older decision: “Georgia does not permit a tortfeasor to derive any benefit from a reduction in damages for medical expenses paid by others, whether insurance companies or beneficent boss or helpful relatives.”
Olariu drew one line the other way: medical bills that had been discharged in the plaintiff’s bankruptcy could not be recovered, because a discharged debt is not a payment by a collateral source.
What changed for claims arising on or after April 21, 2025
Senate Bill 68 added § 51-12-1.1. Its key subsections:
| Subsection | Rule |
|---|---|
| (a), (b) | Medical and healthcare expenses are recoverable "only as provided in this Code section", limited to "the reasonable value of medically necessary care, treatment, or services", as determined by the jury |
| (c) | If the plaintiff "has any form of public or private health insurance, including benefits under a governmental workers' compensation program", the evidence of reasonable value "shall include both the amounts charged … and the amounts actually necessary to satisfy such charges pursuant to the insurance contract or the applicable governmental workers' compensation program, regardless of whether the health insurance has been used, is used, or will be used" |
| (d) | For treatment under a letter of protection, the letter, itemized and coded charges, the buyer and price of any sold receivable, and the referral source are "relevant and discoverable" |
| (e) | The statute "abrogates the common law collateral source rule to the extent necessary to introduce the evidence described in this Code section", while preserving jury instructions on the role of collateral source payments |
| (f) | Both sides may still challenge the reasonableness and medical necessity of any expense |
SB 68 makes this section apply “only with respect to causes of action arising on or after the effective date of this Act”, with earlier claims “governed by prior law”. The act took effect April 21, 2025.
So, does insurance reduce the award?
| Question | Claims arising before April 21, 2025 | Claims arising on or after April 21, 2025 |
|---|---|---|
| Can the defendant subtract insurance payments from the verdict? | No (Olariu) | No; the statute changes evidence, not credits |
| Does the jury hear what insurance pays? | No | Yes, if the plaintiff has health insurance, whether or not it was used |
| What sets the medical award? | Proof of reasonable charges | The jury's finding of "reasonable value", with both numbers in evidence |
| Treated under a letter of protection? | Ordinary discovery | The § 51-12-1.1(d) materials are discoverable |
The result: for newer claims, the gap between a billed amount and a contract rate becomes a fact the jury weighs. The plaintiff may still argue that the billed amount reflects reasonable value, and the defendant may argue for the lower figure.
For example, imagine an MRI billed at $10,000 that the plaintiff’s health plan contract would satisfy for $4,000. On a claim that arose before April 21, 2025, the jury hears the $10,000 charge and not the $4,000. On a claim that arose on or after that date, the jury hears both numbers, whether or not the plan was used, and decides the reasonable value on the evidence.
Benefits that are not medical bills
Section 51-12-1.1 speaks only to “medical and healthcare expenses”. Disability income and other payments are outside its text, so the common-law rule described in Olariu continues to govern them unless another statute provides otherwise. Whether an insurer or employer that paid benefits can be reimbursed from your recovery is a different question from whether the defendant gets a credit; those reimbursement claims are covered in medical liens in a Georgia accident settlement and workers’ compensation and third-party claims.
What to gather if your claim arose after April 21, 2025
- Itemized bills with billing codes from every provider.
- Explanation of benefits statements showing allowed and paid amounts.
- The insurance policy or plan documents, since subsection (c) refers to amounts payable “pursuant to the insurance contract”.
- Any letter of protection, and the provider’s records of any sale of the account.
How medical expenses fit with the other damage categories is explained in the categories of damages recoverable in a Georgia vehicle accident lawsuit.
Sources
- Senate Bill 68 (2025), as passed, §§ 7, 9; Office of Legislative Counsel, 2025 Summary of General Statutes Enacted (Act 9).
- Olariu v. Marrero, 248 Ga. App. 824 (2001)
This page describes Georgia law as of October 2026 for general information. It is not legal advice and does not create an attorney-client relationship.