Will Healthcare Reform Affect P&C Insurance Rates?

Many of the Affordable Care Act’s (ACA) major provisions take effect Jan. 1, 2014, and business owners across the country are curious about the effects that the health care changes will have on the Property & Casualty (P&C) market. Industry experts speculate that the ACA will have the greatest direct impact on medical malpractice liability insurance and workers’ compensation coverages—but whether the changes will result in higher or lower rates is still an ongoing debate.

In theory, as more people gain access to health care, the number of medical malpractice liability lawsuits could decrease because patients will be able to receive earlier treatment for medical problems, leading to better health outcomes. Similarly, as more workers have access to health care, workers’ compensation (WC) rates may also decrease.

Alternatively, some analysts express concerns that the influx of newly covered patients could exacerbate existing staffing shortages and stretch doctors and nurses too thin. This could result in a higher frequency of medical errors and potentially increase the amount of time workers must wait to receive treatment—ultimately leading to higher rates.

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