Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:


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


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."

... more about:
»ACA »Civil »Justice »Liability »accidents »injuries »modifications

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 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!

Further reports about: ACA Civil Justice Liability accidents injuries modifications

More articles from Studies and Analyses:

nachricht New Formula for Life-Satisfaction
01.10.2015 | Rheinische Friedrich-Wilhelms-Universität Bonn

nachricht Carbon storage in soils: Climate vs. Geology
14.09.2015 | Universität Augsburg

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Reliable in-line inspections of high-strength automotive body parts within seconds

Nondestructive material testing (NDT) is a fast and effective way to analyze the quality of a product during the manufacturing process. Because defective materials can lead to malfunctioning finished products, NDT is an essential quality assurance measure, especially in the manufacture of safety-critical components such as automotive B-pillars. NDT examines the quality without damaging the component or modifying the surface of the material. At this year's Blechexpo trade fair in Stuttgart, Fraunhofer IZFP will have an exhibit that demonstrates the nondestructive testing of high-strength automotive body parts using 3MA. The measurement results are available in a matter of seconds.

To minimize vehicle weight and fuel consumption while providing the highest level of crash safety, automotive bodies are reinforced with elements made from...

Im Focus: Kick-off for a new era of precision astronomy

The MICADO camera, a first light instrument for the European Extremely Large Telescope (E-ELT), has entered a new phase in the project: by agreeing to a Memorandum of Understanding, the partners in Germany, France, the Netherlands, Austria, and Italy, have all confirmed their participation. Following this milestone, the project's transition into its preliminary design phase was approved at a kick-off meeting held in Vienna. Two weeks earlier, on September 18, the consortium and the European Southern Observatory (ESO), which is building the telescope, have signed the corresponding collaboration agreement.

As the first dedicated camera for the E-ELT, MICADO will equip the giant telescope with a capability for diffraction-limited imaging at near-infrared...

Im Focus: Locusts at the wheel: University of Graz investigates collision detector inspired by insect eyes

Self-driving cars will be on our streets in the foreseeable future. In Graz, research is currently dedicated to an innovative driver assistance system that takes over control if there is a danger of collision. It was nature that inspired Dr Manfred Hartbauer from the Institute of Zoology at the University of Graz: in dangerous traffic situations, migratory locusts react around ten times faster than humans. Working together with an interdisciplinary team, Hartbauer is investigating an affordable collision detector that is equipped with artificial locust eyes and can recognise potential crashes in time, during both day and night.

Inspired by insects

Im Focus: Physicists shrink particle accelerator

Prototype demonstrates feasibility of building terahertz accelerators

An interdisciplinary team of researchers has built the first prototype of a miniature particle accelerator that uses terahertz radiation instead of radio...

Im Focus: Simple detection of magnetic skyrmions

New physical effect: researchers discover a change of electrical resistance in magnetic whirls

At present, tiny magnetic whirls – so called skyrmions – are discussed as promising candidates for bits in future robust and compact data storage devices. At...

All Focus news of the innovation-report >>>



Event News

EHFG 2015: Securing healthcare and sustainably strengthening healthcare systems

01.10.2015 | Event News

Conference in Brussels: Tracking and Tracing the Smallest Marine Life Forms

30.09.2015 | Event News

World Alzheimer`s Day – Professor Willnow: Clearer Insights into the Development of the Disease

17.09.2015 | Event News

Latest News

Unexpected information about Earth's climate history from Yellow River sediment

09.10.2015 | Earth Sciences

Single atom alloy platinum-copper catalysts cut costs, boost green technology

09.10.2015 | Life Sciences

Indefatigable Hearing

09.10.2015 | Life Sciences

More VideoLinks >>>