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 study, "How Will the Affordable Care Act Affect Liability Insurance Costs?" can be found at http://www.rand.org. Other authors of the report are Paul Heaton and Ian Brantley.
Research for the study was conducted by the RAND Institute for Civil Justice, a research institute within RAND Justice, Infrastructure and Environment. The Institute for Civil Justice is dedicated to improving the civil justice system by supplying policymakers and the public with rigorous and independent research.
Warren Robak | EurekAlert!
High in calories and low in nutrients when adolescents share pictures of food online
07.04.2016 | University of Gothenburg
Brain connectivity reveals hidden motives
04.03.2016 | Universität Zürich
A biological and energy-efficient process, developed and patented by the University of Innsbruck, converts nitrogen compounds in wastewater treatment facilities into harmless atmospheric nitrogen gas. This innovative technology is now being refined and marketed jointly with the United States’ DC Water and Sewer Authority (DC Water). The largest DEMON®-system in a wastewater treatment plant is currently being built in Washington, DC.
The DEMON®-system was developed and patented by the University of Innsbruck 11 years ago. Today this successful technology has been implemented in about 70...
Permanent magnets are very important for technologies of the future like electromobility and renewable energy, and rare earth elements (REE) are necessary for their manufacture. The Fraunhofer Institute for Mechanics of Materials IWM in Freiburg, Germany, has now succeeded in identifying promising approaches and materials for new permanent magnets through use of an in-house simulation process based on high-throughput screening (HTS). The team was able to improve magnetic properties this way and at the same time replaced REE with elements that are less expensive and readily available. The results were published in the online technical journal “Scientific Reports”.
The starting point for IWM researchers Wolfgang Körner, Georg Krugel, and Christian Elsässer was a neodymium-iron-nitrogen compound based on a type of...
In the Beyond EUV project, the Fraunhofer Institutes for Laser Technology ILT in Aachen and for Applied Optics and Precision Engineering IOF in Jena are developing key technologies for the manufacture of a new generation of microchips using EUV radiation at a wavelength of 6.7 nm. The resulting structures are barely thicker than single atoms, and they make it possible to produce extremely integrated circuits for such items as wearables or mind-controlled prosthetic limbs.
In 1965 Gordon Moore formulated the law that came to be named after him, which states that the complexity of integrated circuits doubles every one to two...
Characterization of high-quality material reveals important details relevant to next generation nanoelectronic devices
Quantum mechanics is the field of physics governing the behavior of things on atomic scales, where things work very differently from our everyday world.
When current comes in discrete packages: Viennese scientists unravel the quantum properties of the carbon material graphene
In 2010 the Nobel Prize in physics was awarded for the discovery of the exceptional material graphene, which consists of a single layer of carbon atoms...
24.05.2016 | Event News
20.05.2016 | Event News
19.05.2016 | Event News
30.05.2016 | Materials Sciences
30.05.2016 | Materials Sciences
30.05.2016 | Trade Fair News