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!
Diagnoses: When Are Several Opinions Better Than One?
19.07.2016 | Max-Planck-Institut für Bildungsforschung
High in calories and low in nutrients when adolescents share pictures of food online
07.04.2016 | University of Gothenburg
The Fraunhofer Institute for Organic Electronics, Electron Beam and Plasma Technology FEP has been developing various applications for OLED microdisplays based on organic semiconductors. By integrating the capabilities of an image sensor directly into the microdisplay, eye movements can be recorded by the smart glasses and utilized for guidance and control functions, as one example. The new design will be debuted at Augmented World Expo Europe (AWE) in Berlin at Booth B25, October 18th – 19th.
“Augmented-reality” and “wearables” have become terms we encounter almost daily. Both can make daily life a little simpler and provide valuable assistance for...
With the help of artificial intelligence, chemists from the University of Basel in Switzerland have computed the characteristics of about two million crystals made up of four chemical elements. The researchers were able to identify 90 previously unknown thermodynamically stable crystals that can be regarded as new materials. They report on their findings in the scientific journal Physical Review Letters.
Elpasolite is a glassy, transparent, shiny and soft mineral with a cubic crystal structure. First discovered in El Paso County (Colorado, USA), it can also be...
For the first time, Fraunhofer IKTS shows additively manufactured hardmetal tools at WorldPM 2016 in Hamburg. Mechanical, chemical as well as a high heat resistance and extreme hardness are required from tools that are used in mechanical and automotive engineering or in plastics and building materials industry. Researchers at the Fraunhofer Institute for Ceramic Technologies and Systems IKTS in Dresden managed the production of complex hardmetal tools via 3D printing in a quality that are in no way inferior to conventionally produced high-performance tools.
Fraunhofer IKTS counts decades of proven expertise in the development of hardmetals. To date, reliable cutting, drilling, pressing and stamping tools made of...
At AKL’16, the International Laser Technology Congress held in May this year, interest in the topic of process control was greater than expected. Appropriately, the event was also used to launch the Industry Working Group for Process Control in Laser Material Processing. The group provides a forum for representatives from industry and research to initiate pre-competitive projects and discuss issues such as standards, potential cost savings and feasibility.
In the age of industry 4.0, laser technology is firmly established within manufacturing. A wide variety of laser techniques – from USP ablation and additive...
Every three years, the plastics industry gathers at K, the international trade fair for plastics and rubber in Düsseldorf. The Fraunhofer Institute for Laser Technology ILT will also be attending again and presenting many innovative technologies, such as for joining plastics and metals using ultrashort pulse lasers. From October 19 to 26, you can find the Fraunhofer ILT at the joint Fraunhofer booth SC01 in Hall 7.
K is the world’s largest trade fair for the plastics and rubber industry. As in previous years, the organizers are expecting 3,000 exhibitors and more than...
23.09.2016 | Event News
20.09.2016 | Event News
16.09.2016 | Event News
26.09.2016 | Physics and Astronomy
26.09.2016 | Physics and Astronomy
26.09.2016 | Life Sciences