Medical Cost Trends Likely to Reaccelerate According to Assured Research

Insurance Executives Risk Turning Dovish Prematurely

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Medical inflation may be near a 50-year low, but that doesn't mean it has been tamed.

Madison, NJ (PRWEB) August 21, 2013

The next move for medical cost trends could be sharply higher, according to a new study released by Assured Research, a firm that analyzes the property/casualty insurance industry. In its recent report, “Will the Slowdown in Medical Inflation Fuel Reserve Releases?” the firm raises questions about the Obama Administration’s claim that the Affordable Care Act (ACA) has begun to bend the medical cost curve.

“While it is true that medical inflation is near a 50-year low, that doesn’t mean it has been tamed,” asserts Assured president William Wilt. “We believe the recession and wage stagnation are having a bigger impact on costs than the ACA.”

Assured Research’s report, which focuses on medical inflation as it impacts property/casualty insurers, can be purchased at http://www.assuredresearch.com/Research.html/. The report challenges arguments put forth in the President’s 2013 Economic Report. For instance, the Administration argues that structural changes spurred by the ACA – including increased cost-sharing – are possible sources of the decline in spending growth.

“To the contrary, out-of-pocket medical costs in the U.S. – an acknowledged source of spending restraint – are already among the lowest across developed countries and set to trend even lower under the ACA,” according to the Assured Research report. The report examines other trends affecting insurers, including the expansion of coverage and health care consolidation.

The relevance for property/casualty insurance executives? Increasingly dovish insurance managers may be inclined to prematurely release reserves accrued on expectation of higher medical cost trends. Financial disappointments and erratic earnings could materialize if, as Assured Research concludes, insurance executives release temporary fillips into their income statements just as a confluence of demographic, social, economic, and business trends conspire to reignite medical inflation.

About Assured Research: Assured Research is a property/casualty insurance research firm with headquarters in Madison, New Jersey. The firm produces industry research analyzing financial, claim, and business development matters relevant to insurance professionals. Subscribing clients include (re)insurers, consultants, and intermediaries. This Assured report, found in the August edition of its monthly Assured Briefing, is available for purchase at http://www.assuredresearch.com/Research.html/.

William Wilt, the president of the firm, is available for interviews. Write to him at william(dot)wilt(at)assuredresearch(dot)com or call (973)377-2908.


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