GEICOBAMACARE? The ACA Could Save You Money On Car Insurance

April 9, 2014 6:00 a.m.
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The ancillary effects of Obamacare will take years to mete out. But a study released Wednesday has taken a stab at some of them, particularly other forms of insurance. Its conclusion? Expanding health insurance coverage might drive down the costs of auto insurance.

RAND Corp, a non-profit think tank, released the study estimating how Obamacare would influence car insurance, workers’ compensation claims and medical malpractice suits. For the first two, it projects a decrease in liability costs, which could in turn lead to lower costs for consumers. For the latter, the analysts anticipate an increase in costs.

“Ultimately, any cost changes experienced by insurance companies could be passed on to consumers through changes in premiums and coverage options,” the group wrote in a summary of its findings.

For both first-party (1.4 percent) and third-party (1.7 percent) car insurance, RAND projected a decrease in liability costs. Workers’ compensation costs are also estimated to decline by 1.4 percent.

The decrease is a combination of a few different factors. People sometimes use non-health insurance to cover health problems that aren’t related to any specific accident, for example. If they are covered through conventional health insurance, they might be less likely to do so.

Obamacare also changes some Medicare payment rates, and Medicare is sometimes used by the other insurance industries as a benchmark to set their own reimbursement rates for health care providers.

The study projected medical malpractice liability costs, on the other hand, to increase 2.4 percent. That’s because more people being insured could create more opportunities for such suits to be filed.

The authors noted that the changes are likely to vary across state lines and industries. They also stressed “there is considerable uncertainty in our estimates, which are intended as broad indicators of sign and magnitude rather than as specific predictions.”

For a full methodology and explanation of its findings, read the full study here.

Photo illustration by TPM’s Christopher O’Discoll. This post has been updated.

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