The Effect of Health Insurance Coverage Expansions on Auto Liability Claims and Costs

37 Pages Posted: 14 Dec 2017 Last revised: 18 Sep 2020

See all articles by Srikanth Kadiyala

Srikanth Kadiyala

RAND Corporation

Paul S. Heaton

University of Pennsylvania Law School

Date Written: June 13, 2017


How do the Affordable Care Act health insurance coverage expansions affect payment for medical care provided through liability insurance, such as auto insurance? Theoretically, expanding coverage might lead to a substitution of health insurance disbursements for automobile insurance disbursements. Alternatively, expanding health insurance coverage might increase utilization of medical care, increasing auto liability claims payments. The net effect of these two mechanisms can only be determined empirically. We evaluate the health insurance-auto insurance interaction by examining the 2010 ACA dependent coverage expansion. Prior to 2010, individuals 19 and older were excluded from health insurance coverage under their parental health insurance plan. In September 2010, as part of the ACA, individuals were allowed to continue health insurance coverage until age 26. We use this policy change and claims data from insurers representing approximately 60% of the automobile passenger market to evaluate the effects of expanding health insurance coverage on auto liability claim payments. Using a difference-in-difference research design, we find an approximate 10% reduction in the total BI claim count in the policy-affected 19-25 ages when compared to the control group of individuals 26-34. Conditional on filing a claim, we also find an approximate 9% reduction in the mean total auto insurance paid amount in the 19-25 ages compared to the 26-34 ages. We do not identify any effects of the policy on the PIP auto insurance line.

Keywords: Affordable Care Act

Suggested Citation

Kadiyala, Srikanth and Heaton, Paul S., The Effect of Health Insurance Coverage Expansions on Auto Liability Claims and Costs (June 13, 2017). RAND Working Paper Series WR- 1214, U of Penn, Inst for Law & Econ Research Paper No. 18-2, Available at SSRN: or

Srikanth Kadiyala (Contact Author)

RAND Corporation ( email )

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P.O. Box 2138
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Paul S. Heaton

University of Pennsylvania Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States

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