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Study: ACA Could Change Costs for Auto, Medical Professional Liability (MPL), and Other Insurance

The expansion of health insurance coverage in the wake the Affordable Care Act (ACA) may alter costs for several major types of liability insurance, according a new report from RAND. But these changes are likely to be modest, according to the report. Automobile, workers’ compensation, and general business liability insurance costs may fall under the Affordable Care Act, while costs for MPL coverage could be higher. The changes could be as much as 5% of costs in some states, the researchers say, but they add a caveat, stressing the considerable uncertainty in their estimates.

The findings derive from one of the first systematic studies of how the ACA could influence costs for liability and related lines of insurance. David Auerbach, the study’s lead author, notes that, “For example, auto insurers may spend less for treating injuries, while it may cost a bit more to provide physicians with medical [liability] 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.

An increase in the number of people using the healthcare system may trigger a corresponding increase in the number of MPL claims made against physicians and other healthcare providers, according to the study. Such a shift could drive MPL costs modestly higher. The researchers point out that there are many state-level variables that will influence any impacts on liability costs created by the ACA. (read more: Science Codex, 4/8)