Are you a fan of Obamacare? Or are you against it? Obamacare has received a mix of opinions, but they might have a great outcome – why? Auto insurance premiums might drop. What does healthcare have to do with the auto industry? Actually, there is a link because a lot of healthcare claims are related to road injuries and accidents. This statement has been made in a recent report.
The report claims that after Obamacare, more people have medicinal coverage now. Since auto insurers expect they will now have to deal with a reduced number of claims, they can pass these saving on to the consumers.
According to a member of the team which has prepared the report, the Affordable Care Act will not change liability costs, but there is a good chance that other costs may decline in the next few years. He added that auto insurers might now be spending lesser amounts on injuries. However, higher costs might incur in providing medical malpractice coverage to physicians. Costs for this are expected to rise in the near future.
Will the premium rates of other policies also decline? The report does mention that in the time to come, worker’s compensation, general business liability insurance and homeowners’ insurance may become more affordable as costs decrease.
The premiums will probably fall, but how significant will be the decrease? The report claims it can be as much as 5% in some of the states, but there is still no certainty. Though estimates have been made, they cannot be fully trusted because of incomplete data.
The report says that as of now, liability insurers reimburse amounts that lie in the billion dollar range for claims related to workplace injuries, car crashes and other similar things. In the year 2007, auto insurers paid over $35 billion for medical claims for accidents in that year. This amount was about 2% of the total healthcare costs for that year.
What about malpractice coverage? Premiums will rise, but by how much? That depends. As per the stats, insurers had to deal with around 12,000 claims which resulted in an expense of over $4 billion.
The report team also told the press that their analysis did not include the signups in the month of March and April. If these numbers are added, the rates should probably go down even more.