The Affordable Care Act (ACA) May Adversely Affect Property and Casualty (P&C) Insurers

A recent analysis by the Insurance Research Council (IRC), P&C insurers may be facing new challenges for cost shifting.

A recently released report by the IRC suggests the P&C insurance industry is likely to face cost shifting by hospitals, physicians and other medical providers due to the Patient Protection and Affordable Care Act (ACA). In addition to cost shifting, the IRC whitepaper entitled "The Affordable Care Act and Property/Casualty Insurance" said there may be more fraudulently submitted claims. Several key observations include:

1. The claim cost increases could increase if injured persons try to obtain the first-dollar coverage provided by property/casualty insurance coverage as an alternative to the higher deductibles.
2. "Increased cost containment efforts by public and private health insurers" will show up in higher charges and a higher volume of billed services, the report said. Medical providers will be tempted to shift costs to replace lost revenues from health insurance providers, which the IRC says is already happening in the private passenger auto insurance market..
3. The ACA may potentially reduce future medical costs included in the calculation of damages in third-party liability claims if methods are utilized to detect and manage claims.

To learn more about how to protect against this type of adverse situation, please call us for a free consultation at 585-586-4530 about our RiskPro Health Analytics resources and teams