Obamacare May Reduce Auto Insurance Rates


What's Hot


2 Types of Black Marks Might Vanish From Your Credit File SoonBorrow

6 Ways the Obamacare Overhaul Might Impact Your WalletInsurance

7 Dumb and Costly Moves Homebuyers MakeBorrow

This Free Software Brings Old Laptops Back to LifeMore

Obamacare Replacement Plan Gets ‘F’ Rating from Consumer ReportsFamily

Beware These 12 Common Money MistakesCredit & Debt

21 Restaurants Offering Free Food Right NowSaving Money

17 Ways to Have More Fun for Less MoneySave

House Hunters: Beware of These 6 Mortgage MistakesBorrow

30 Household Uses for Baby OilSave

25 Ways to Spend Less on FoodMore

Nearly Half of Heart-Related Deaths Linked to These 10 Foods and IngredientsFamily

5 Surprising Benefits of Exercising Outdoors in WinterFamily

10 Ways to Save When You’re Making Minimum WageSave

Boost Your Credit Score Fast With These 7 MovesCredit & Debt

7 Painless Ways to Pay Off Your Mortgage Years EarlierBorrow

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

The True Cost of Bad CreditCredit & Debt

10 Companies With the Best 401(k) PlansGrow

This Scam Now Tops ID Theft as the No. 2 Consumer ComplaintFamily

6 Stores With Awesome Reward ProgramsFamily

6 Ways to Save More at Lowe’s and The Home DepotSave

6 Healthful Treats for Your DogFamily

New Study Ranks the Best States in the U.S.Family

Thousands of Millionaires Moving to 1 Country — and Leaving AnotherGrow

Strapped for College Costs? How to Get the Most From FAFSABorrow

6 Overlooked Ways to Save at Chick-fil-AFamily

Ask Stacy: What’s the Fastest Way to Pay Off My Mortgage?Borrow

Where to Sell Your Stuff for Top DollarAround The House

8 Ways to Get a Good Price on a Shiny New AutoCars

Ask Stacy: How Do I Start Over?Credit & Debt

Secret Cell Plans: Savings Verizon, AT&T, T-Mobile and Sprint Don’t Want You to Know AboutFamily

30 Awesome Things to Do in RetirementCollege

14 Super Smart Ways to Save on TravelSave

The Rich Prefer Modest Cars — Should You Join Them?Cars

You’ll Soon Pay More to Shop at CostcoSave

10 Ways to Save When Your Teen Starts DrivingFamily

Auto insurance premiums could fall slightly as medical coverage related to the Affordable Care Act takes on more injury treatment costs, according to a new report by the Rand Corporation.

This post comes from Mark Chalon Smith at partner site Insurance.com.

A benefit of the Affordable Care Act may be a drop in car insurance premiums as health care providers shoulder more of the treatment costs tied to accidents and injuries, according to a new report from a leading think tank.

The nonprofit Rand Corporation says the rise in the number of people with medical coverage under the ACA, also known as Obamacare, could result in a “modest” drop in claims against auto insurers. In turn, the cost savings could be passed to consumers as insurance companies and state regulators evaluate and refine coverage rates, according to Rand’s report, “How Will the Affordable Care Act Affect Liability Insurance Costs?”

“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,” says David Auerbach, a Rand policy researcher and the study’s lead author. “For example, auto insurers may spend less for treating injuries, while it may cost a bit more to provide physicians with medical malpractice coverage.”

Besides auto insurance rates, expenses tied to homeowners insurance, workers’ compensation and general business liability insurance may also fall once the ACA further takes hold. But on the downside, expenses for malpractice coverage could rise, according to the report.

Obamacare to trim insurance costs by up to 5 percent?

“Researchers say the changes could be as much as 5 percent of costs (for auto, home and the other forms of liability insurance) in some states, but caution there is considerable uncertainty surrounding such estimates,” the study notes.

Auerbach and Rand point out that liability insurers currently reimburse tens of billions of dollars each year for medical care related to car crashes and workplace injuries, among other 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,” according to Rand.

The reason for a possible jump in malpractice claims faced by doctors and health providers is simple: Rand says that more claims could be filed as more people get medical coverage.

“Insured individuals have more contacts with physicians, make more visits and receive more procedures,” the report says. “Such a shift could drive malpractice costs modestly higher.”

The malpractice figures are already significant. The study points out:

In 2012, nearly 12,000 medical malpractice claims paid on behalf of individual physicians and other providers accounted for $4.3 billion in costs. A substantial additional number of claims were paid on behalf of institutions, such as hospitals, some of which self-insure, that are not included in the $4.3 billion number.

The study was sponsored by Swiss Re, which stresses the powerful effects the ACA may ultimately have on the insurance industry and elsewhere. “Businesses and policymakers need to understand how and why their risk profiles might change as the Affordable Care Act is implemented,” Jayne Plunkett, Swiss Re’s head of casualty reinsurance, said in a statement.

A surge in medical insurance enrollments

In a separate survey, Rand estimated “a net gain of 9.3 million in the number of American adults with health insurance coverage from September 2013 to mid-March 2014.” While noting that any survey has a margin of error, Rand added that its findings didn’t include those who signed up for coverage in late March and early April. That enrollment surge could “dramatically affect” the total figures, Rand said.

Rand estimated that Americans without insurance fell to 15.8 percent, from 20.5 percent.

Of those who secured new medical coverage between September and March, 8.2 million didn’t buy it on the ACA’s federal or state-run exchanges, but through an employer. Rand says the increase was likely because of a drop in unemployment, which opened the door for many to be eligible for workplace plans, and ACA incentives encouraging employees to get coverage.

Rand added that 3.9 million secured health insurance through the exchanges, 36 percent of them previously uninsured. That number was expected to rise as the March and April numbers came in.

In declaring the ACA an unfolding success, the Obama administration recently said that more than 7 million people signed up for coverage through the marketplace exchanges.

More on Insurance.com:

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!

💰🗣📰

Read Next: 50 Ways to Make a Fast $50

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 2,001 more deals!