ACA Deathwatch – The Impact on Workers’ Comp

With Republicans getting closer to repealing ACA, it’s time to consider how this would impact workers’ compensation.

I’ve discussed the possible impact of ACA here; net is the big increase in the insured/employed population may be at least partially responsible for the flat-to-declining work comp medical costs we’ve seen over the last two years.

There’s also this.  A colleague alerted me to a 2014 RAND study that assessed the potential impact of ACA on liability insurance, including workers’ comp in 2016.

RAND’s main takeaway:

“the ACA is expected to reduce auto and workers’ compensation insurer costs and increase medical professional liability insurer costs by a few percentage points as of 2016.”

The report is fairly complex (a summary is here); here’s what it had to say in bullet points.

  1. RAND estimated work comp costs would be $930 million lower due to ACA.
  2. This reduction is driven by lower fees and other insurance coverage for workers.

“Lower fees” derive from lower fee schedules (we’ve seen this in imaging in CA and FL and facility and surgery in other states) and lower prices due to providers less concerned about indigent care and associated bad debt.

“Other insurance coverage” refers to group health or Medicaid coverage for non-occ conditions, as well as substituting for workers’ comp in some instances.

If ACA is repealed without a simultaneous and credible replacement, we may well see a rise in the number of workers without health insurance. The key issue to track is a cutoff of funding for Medicaid expansion – ACA added about 13 million more employed people to the insured rolls; if they lose coverage they’ll need a different payer to cover their injuries. Bad news for workers’ comp.

There are other issues, but Medicaid is the big one.

What does this mean for you?

Be careful what you wish for.  And be even more careful of hasty and simple solutions to very complex problems.

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