Featured Research

from universities, journals, and other organizations

ACA could change costs for auto, malpractice, other insurance, study finds

Date:
April 9, 2014
Source:
RAND Corporation
Summary:
The Affordable Care Act focuses on reforming health insurance, but the federal legislation also could have an impact on other forms of insurance. A new study finds that the Affordable Care Act may alter costs for automobile, workers' compensation and malpractice insurance, with changes being as much as 5 percent in some states.

The expansion of health insurance accomplished under the Affordable Care Act may alter costs for several major types of liability insurance, although any such changes are likely to be modest, according to a new RAND Corporation report.

Automobile, workers' compensation and general business liability insurance costs may fall under the Affordable Care Act, while costs for medical malpractice coverage could be higher, according to the study.

Researchers say the changes could be as much as 5 percent of costs in some states, but caution there is considerable uncertainty surrounding such estimates. The findings are from one of the first systematic studies of how the Affordable Care Act could influence costs for liability and related lines of insurance.

"The Affordable Care Act is unlikely to dramatically affect liability costs, but it may influence small and moderate changes in costs over the next several years," said David Auerbach, the study's lead author and a policy researcher at RAND, a nonprofit research organization. "For example, auto insurers may spend less for treating injuries, while it may cost a bit more to provide physicians with medical malpractice coverage."

RAND researchers examined how the Affordable Care Act might operate across different liability lines and how the impacts might vary across states given existing laws, population demographics and other factors.

Liability insurance companies reimburse tens of billions of dollars each year for medical care related to auto accidents, workplace injuries and other types of claims. For example, auto insurers collectively paid $35 billion for medical costs associated with accidents in 2007, about 2 percent of all U.S. health care costs in that year.

But some of those costs may be covered by regular health insurance as more Americans become newly covered under the Affordable Care Act, according to the study.

As that happens, the cost of providing automobile insurance, workers compensation and homeowners insurance may decline. Ultimately, any cost changes experienced by insurance companies could be passed on to consumers through changes in premiums and coverage options.

Meanwhile, an increase in the number of people using the health care system may trigger a corresponding increase in the number of medical malpractice claims made against physicians and other health care providers, according to the study. Such a shift could drive malpractice costs modestly higher.

Researchers say there are many state-level variables that will influence any impacts on liability costs created by the Affordable Care Act. This includes items such as whether states require medical costs to be deducted from liability awards or whether states choose to implement the Affordable Care Act's optional Medicaid expansion.

While the study primarily focuses on the short-term impacts of health reform on the cost of liability insurance, RAND researchers also suggest that the Affordable Care Act could have additional long-run impacts.

Costs of liability insurance could be reduced further if reforms aimed at driving down health care costs are successful, for example. Other potential long-run changes include modifications of tort law, shifts in pricing of medical services, changes in the number of practicing physicians and increased efforts by Medicaid to recover a portion of injury payments.

"This study highlights the far-reaching impacts of the Affordable Care Act," said Jayne Plunkett, head of casualty reinsurance for Swiss Re, a reinsurance company that sponsored the study. "Businesses and policymakers need to understand how and why their risk profiles might change as the Affordable Care Act is implemented."

The report is available online at: http://www.rand.org/pubs/research_reports/RR493.html


Story Source:

The above story is based on materials provided by RAND Corporation. Note: Materials may be edited for content and length.


Cite This Page:

RAND Corporation. "ACA could change costs for auto, malpractice, other insurance, study finds." ScienceDaily. ScienceDaily, 9 April 2014. <www.sciencedaily.com/releases/2014/04/140409094230.htm>.
RAND Corporation. (2014, April 9). ACA could change costs for auto, malpractice, other insurance, study finds. ScienceDaily. Retrieved October 21, 2014 from www.sciencedaily.com/releases/2014/04/140409094230.htm
RAND Corporation. "ACA could change costs for auto, malpractice, other insurance, study finds." ScienceDaily. www.sciencedaily.com/releases/2014/04/140409094230.htm (accessed October 21, 2014).

Share This



More Health & Medicine News

Tuesday, October 21, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

CDC Revamps Ebola Guidelines After Criticism

CDC Revamps Ebola Guidelines After Criticism

Newsy (Oct. 21, 2014) The Centers for Disease Control and Prevention have issued new protocols for healthcare workers interacting with Ebola patients. Video provided by Newsy
Powered by NewsLook.com
'Cadaver Dog' Sniffs out Human Remains

'Cadaver Dog' Sniffs out Human Remains

AP (Oct. 21, 2014) Where's a body buried? Buster's nose can often tell you. He's a cadaver dog, specially trained to find human remains and increasingly being used by law enforcement and accepted in courts. These dogs are helping solve even decades-old mysteries. (Oct. 21) Video provided by AP
Powered by NewsLook.com
How Nigeria Beat Its Ebola Outbreak

How Nigeria Beat Its Ebola Outbreak

Newsy (Oct. 20, 2014) The World Health Organization has declared Nigeria free of Ebola. Health experts credit a bit of luck and the government's initial response. Video provided by Newsy
Powered by NewsLook.com
How Detroit's Money Woes Led To U.N.-Condemned Water Cutoffs

How Detroit's Money Woes Led To U.N.-Condemned Water Cutoffs

Newsy (Oct. 20, 2014) The United Nations says water is a human right, but should it be free? Detroit has cut off water to residents who can't pay, and the U.N. isn't happy. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Health & Medicine

Mind & Brain

Living & Well

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins