When people heard about the new tax reform bill enacted by the Trump administration they were mostly interested in how they would be affected. Whether or not their individual taxes will end up being less has been the prevailing question that most think of. Something that does not come to mind is whether their car insurance will go up, after all, what does tax reform have to do with car insurance?
Tax reform doesn’t have anything to do with car insurance, directly. But what most people forget about is that the tax reform bill has also affected the Affordable Care Act by repealing the individual mandate that requires most Americans to have health insurance. With the mandate gone, less people feel obligated to pay for health insurance. This growing pool of people with no health insurance has a way of trickling down into other areas, including car insurance.
When people think of car insurance, they think that it’s something that is needed to pay for repairs on the car if you’re in an accident. Although it is true that car insurance will pay for your car repairs after an accident, people don’t realize that most of what car insurance pays out goes towards medical bills. So, this is where people without medical insurance come in.
The cost of medical care after a car accident depends in part on whether the patient has health insurance. Things are ok when there are just minor injuries, the problems arise when the injuries require more doctor’s examinations. There is always a chance that there are pre-existing conditions that the patient hadn’t been treating because they had no funds, and no insurance. Well now there is the possibility that in these situations, treatment for conditions that were exposed by the car accident will end up being paid for by the car insurance company. This could eventually lead to higher insurance rates.
Interesting how one thing affects another. Here we have a tax reform bill that may eventually lead to higher insurance rates. Only time will tell.