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How Obamacare lowers your auto insurance rates

The costs of workers' compensation coverage and general business liability insurance also could drop, according to a RAND Corporation analysis of the Affordable Care Act.

By Money Staff Apr 9, 2014 2:35PM

This post comes from Bruce Japsen at partner site on MSN MoneyThe cost of automobile insurance, workers' compensation coverage and general business liability insurance could drop by as much as 5 percent thanks to the Affordable Care Act, according to a new study.

Though the health law doesn’t cover cars or workers compensation, new analysis by RAND Corporation indicates it may help car owners and businesses with workers' compensation coverage because those premiums sometimes go toward treating people’s injuries, particularly those without medical coverage.

Couple driving in convertable © Blend Images, SuperStockLiability insurance companies reimburse "tens of billions of dollars" each year for medical care related to auto accidents, workplace injuries and related claims, RAND researchers say. Auto insurers paid $35 billion for "medical costs associated with accidents in 2007," RAND says, saying that totaled about 2 percent of all health care costs that year.

"Under reasonable assumptions, some effects can generate potential cost changes as high as 5 percent or more in certain states and for certain insurance lines," Rand researchers Paul Heaton and Ian Brantley write in their study summary.  "Most are in the negative (cost-reducing) direction. In the case of the individual substation effect, liability insurers are, today, paying for some of the additional costs associated with treating the uninsured."

Jayne Plunkett, head of casualty reinsurance for Swiss Re, a reinsurance company that sponsored the study, says the study shines light on "the far-reaching impacts of the Affordable Care Act."

"Businesses and policymakers need to understand how and why their risk profiles might change as the Affordable Care Act is implemented," Plunkett says in a statement accompanying the RAND report.

While auto premiums and other forms of coverage could go down, researchers caution that medical liability coverage could go up. For example, RAND researchers said an increasing number of people using the health care system may trigger an increase in the number of malpractice claims against doctors and hospitals.

More than 7 million Americans signed up for coverage on government-run marketplaces to health plans operated by an array of private plans sold by Aetna, Humana, UnitedHealth Group and most Blue Cross and Blue Shield plans. In addition more than 3 million Americans have signed up for Medicaid health insurance for the poor, which was also expanded under the health law.

"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, 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."

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Apr 9, 2014 3:12PM
OMG!!! This article is a desperate reach...
Apr 9, 2014 3:17PM
Not going to happen. Just like it will never lower medical insurance rates or the cost of medical care.
Apr 9, 2014 3:39PM
There is no way possible that it is worth the expense it has brought upon Americans. This article is really S T  R   E   T   C  H  I  N  G the truth!
Apr 9, 2014 4:28PM

Headline reads: “”How Obamacare Lowers Your Auto Insurance Rates””


MSN left-out the source, to wit; “I’m Barack Hussein Obama and I Approve This Message.”


and that -


Message was paid for by:


The White House

Office of Propaganda and Misinformation

Washington, D.C.

Apr 9, 2014 4:18PM

Wooo! My 100$ monthly car insurance bill will drop to 95$, to bad my health insurance bill will be hundreds of dollars per month with a HUGE deductible!

MSN is getting DESPERATE to come up with any slanted story to try and make a success of this whopping failure!!!

Apr 9, 2014 3:54PM
So I pay twice as much for health insurance, and "COULD" see my car insurance rates drop by 5%?  Doesn't sound like a good deal to me.  It sure isn't affordable either.
Apr 9, 2014 4:26PM
Another Lie leaked out of DC to make the lying POTUS look better....not going to work!
Apr 9, 2014 4:10PM

Yeah, right.  My car insurance has gone up twice in the last year and it is going up again in June.


What a crock of crap.

Apr 9, 2014 5:42PM
After you pay your unaffordably high 0bamacare deductible, can't even afford gasoline,..let alone a car,..therefore no need for auto insurance - problem solved. Communist brilliance on display.
Apr 9, 2014 5:18PM
the sad part of this is there are idiots out there that believe this crap and will vote to keep these idiot in office WAKE UP AMERICA
Apr 9, 2014 4:20PM
obomma care is plenty afordable , just do not buy it ! Problem solved LOL
Apr 9, 2014 4:30PM

A moderate change in car insurance cost In the next several years... lets hope we we have a more competent president who will wipe out Obamacare by that time-HOPEFULLY.


I have had medical coverage through my company for many years. this has not affected the high cost of my car insurance. This is BS.

Apr 9, 2014 4:33PM
So Obama can walk down the sidewalk dropping $100 bills and actually get 7M people to pick them up.  Oh Baby what an accomplishment!  (of course it's other people's money - not his).
I know people that all they've done is tie their shoes for the day and have already accomplished greater things than that.

Come to think of it - slipping on my flip flops is a greater accomplishment than free money giveaways.

Just think, now that the free money approach has started, all the politicians have to do to win the next election is offer more free stuff than the opponent.

Good times are a comin'.
Apr 9, 2014 5:45PM
I don't buy it.  Not when Obamacare insurance costs twice what insurance did before that jerk stuck his nose in where it didn't belong.
Apr 9, 2014 6:21PM
What's that old saying? Liars figure and figures lie. If the government would please stop trying to help me, I could make great strides forward.
Apr 9, 2014 4:47PM
By this logic, we can raise minimum salary for everyone to $200k per year and in five years everyone will be millionaires!
Apr 9, 2014 5:47PM
First the brothers in the hood have to buy car insurance! 
Apr 9, 2014 4:28PM
I would rather have the choice on how I cover myself with either one.  If I'm in the right position I would rather self insure and leave the government and insurance companies out of the entire process.
Apr 9, 2014 6:16PM
If you like your car insurance you can keep your car insurance 
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