Pollution and Health Care Costs: States Can and Should Seek Medicaid Reimbursement from Big Polluters
By Jessica E. Yates
INTRODUCTION
States routinely pay for medical expenses related to health problems sustained from pollution, but thus far have failed to pursue reimbursement from those responsible. The stakes are high. For example, recent analyses of the health impact of diesel and power plant emissions found that the resulting hospitalizations for cardiovascular and respiratory problems cost $664 million each year. Since Medicaid, the primary government health care program for low-income individuals, pays about 15.7% of the country's health care costs, this would mean that the program pays roughly $104 million each year for hospital admissions related to diesel soot ($41.5 million) and power plant emissions ($62.8 million). Pollutants such as dioxin that are discharged into water and soil undoubtedly can cause health problems as well. Moreover, state governments may be bearing a disproportionate share of that burden because they pay for the health care of low-income individuals who are exposed to more pollution than middle- and upper-income individuals. This pattern suggests a need for states--which are struggling to fully fund their Medicaid programs--to recover some of those costs from the parties responsible for causing the pollution.
State suits for compensation make sense given the inadequacy of other avenues for recovering the costs of treating people who have been injured by polluters. The relationship between exposure to toxic substances and adverse health effects has been well-documented, prompting an extensive federal regulatory scheme to limit human exposure to such substances. However, federal environmental law does not provide states or individuals with a right of action for health care cost recovery. Individuals can seek compensation through personal injury litigation for health problems caused by a defendant's release of a harmful substance, but many such suits are blocked by inadequate evidence that the plaintiff's injuries were specifically caused by this discharge. Further, very large cases of exposure and illness are hampered by challenges inherent to class certification and case management difficulties, even in the face of overwhelming evidence that the defendant's pollution caused physical harm.
Moreover, the personal injury litigation framework generally results in no compensation for health problems related to more diffuse pollution, despite ample research showing general causation. Individual suits likely will fail here because the link between such pollution and specific injuries is much less linear than in cases with isolated discharges of contaminants. One annotation notes that “[a]ir pollution medicine is largely epidemiologic . . . it concerns the incidence of disease in the population.” It is undisputed that air pollution can cause lung disease, heart disease and asthma, but it is hard to map the incidence of disease to particular “doses” of pollution from individual entities, which can make personal injury litigation very difficult. Instead, regulatory law and even state-wide injunctive suits have been the predominant mechanisms for linking diffuse pollution and health effects. Notably, recent EPA clean air regulations for mercury and fine particulates have estimated the health care savings generated by the new requirements, which are based on studies estimating the health care costs incurred from current pollution levels.
Despite the strong causal links between such air pollution and costly health problems, states apparently have assumed that it would be futile to attempt to recover related health care costs. In the absence of a regulatory or liability regime to address that gap, states and the federal government will continue to pay for a significant portion of the health costs associated with pollution, because they pay about a third of all U.S. health care expenses through Medicare, Medicaid and related programs. The impact on government funds is likely even higher because the individuals qualifying for these government programs often are those at a higher risk of being exposed to pollution that causes health problems. Environmental Defense and other organizations are mapping demographic and health data to show how impoverished families suffer pollution-related health problems at a higher rate than other families, specifically measuring their cancer risks from air pollutants, plus proximity to sources of hazardous waste and toxic chemicals. The EPA is also focusing on vulnerable populations. For example, certain ethnic communities consume vastly more fish, much from their own fishing, compared to the rest of the population. An EPA Advisory Committee found that they also tend to be very poor and have disproportionate exposure to varied and potentially severe health problems from consuming fish that have accumulated toxins in their bodies from agricultural run-off, industrial discharges, and other sources.
Although such data paint an even more compelling picture for action, states need not invoke an “environmental justice” theory to pursue recovery of state health care expenses for poor people that should properly be borne by another party. States began to realize the potential for cost recovery--and the ability for responsible industries to internalize such costs--in the tobacco litigation of the 1990s. Lest a state wonder whether the recoveries would be worthwhile, the EPA's regulatory cost-benefit analysis suggests that excess pollution is costing the country billions in health care costs. Polluting entities arguably are externalizing the costs of their activities to state programs that pay for the resulting health care. Fortunately, case law and statutory authority can support states in pursuing such goals.
States routinely pay for medical expenses related to health problems sustained from pollution, but thus far have failed to pursue reimbursement from those responsible. The stakes are high. For example, recent analyses of the health impact of diesel and power plant emissions found that the resulting hospitalizations for cardiovascular and respiratory problems cost $664 million each year. Since Medicaid, the primary government health care program for low-income individuals, pays about 15.7% of the country's health care costs, this would mean that the program pays roughly $104 million each year for hospital admissions related to diesel soot ($41.5 million) and power plant emissions ($62.8 million). Pollutants such as dioxin that are discharged into water and soil undoubtedly can cause health problems as well. Moreover, state governments may be bearing a disproportionate share of that burden because they pay for the health care of low-income individuals who are exposed to more pollution than middle- and upper-income individuals. This pattern suggests a need for states--which are struggling to fully fund their Medicaid programs--to recover some of those costs from the parties responsible for causing the pollution.
State suits for compensation make sense given the inadequacy of other avenues for recovering the costs of treating people who have been injured by polluters. The relationship between exposure to toxic substances and adverse health effects has been well-documented, prompting an extensive federal regulatory scheme to limit human exposure to such substances. However, federal environmental law does not provide states or individuals with a right of action for health care cost recovery. Individuals can seek compensation through personal injury litigation for health problems caused by a defendant's release of a harmful substance, but many such suits are blocked by inadequate evidence that the plaintiff's injuries were specifically caused by this discharge. Further, very large cases of exposure and illness are hampered by challenges inherent to class certification and case management difficulties, even in the face of overwhelming evidence that the defendant's pollution caused physical harm.
Moreover, the personal injury litigation framework generally results in no compensation for health problems related to more diffuse pollution, despite ample research showing general causation. Individual suits likely will fail here because the link between such pollution and specific injuries is much less linear than in cases with isolated discharges of contaminants. One annotation notes that “[a]ir pollution medicine is largely epidemiologic . . . it concerns the incidence of disease in the population.” It is undisputed that air pollution can cause lung disease, heart disease and asthma, but it is hard to map the incidence of disease to particular “doses” of pollution from individual entities, which can make personal injury litigation very difficult. Instead, regulatory law and even state-wide injunctive suits have been the predominant mechanisms for linking diffuse pollution and health effects. Notably, recent EPA clean air regulations for mercury and fine particulates have estimated the health care savings generated by the new requirements, which are based on studies estimating the health care costs incurred from current pollution levels.
Despite the strong causal links between such air pollution and costly health problems, states apparently have assumed that it would be futile to attempt to recover related health care costs. In the absence of a regulatory or liability regime to address that gap, states and the federal government will continue to pay for a significant portion of the health costs associated with pollution, because they pay about a third of all U.S. health care expenses through Medicare, Medicaid and related programs. The impact on government funds is likely even higher because the individuals qualifying for these government programs often are those at a higher risk of being exposed to pollution that causes health problems. Environmental Defense and other organizations are mapping demographic and health data to show how impoverished families suffer pollution-related health problems at a higher rate than other families, specifically measuring their cancer risks from air pollutants, plus proximity to sources of hazardous waste and toxic chemicals. The EPA is also focusing on vulnerable populations. For example, certain ethnic communities consume vastly more fish, much from their own fishing, compared to the rest of the population. An EPA Advisory Committee found that they also tend to be very poor and have disproportionate exposure to varied and potentially severe health problems from consuming fish that have accumulated toxins in their bodies from agricultural run-off, industrial discharges, and other sources.
Although such data paint an even more compelling picture for action, states need not invoke an “environmental justice” theory to pursue recovery of state health care expenses for poor people that should properly be borne by another party. States began to realize the potential for cost recovery--and the ability for responsible industries to internalize such costs--in the tobacco litigation of the 1990s. Lest a state wonder whether the recoveries would be worthwhile, the EPA's regulatory cost-benefit analysis suggests that excess pollution is costing the country billions in health care costs. Polluting entities arguably are externalizing the costs of their activities to state programs that pay for the resulting health care. Fortunately, case law and statutory authority can support states in pursuing such goals.