Is the Affordable Care Act lowering workers’ comp medical costs?
Sure looks that way.
Data from NCCI’s 2016 AIS and HSA clients suggested ACA’s impact was positive and sustained. Flat-to-declining total medical costs over a two-year period that coincided with the full implementation of ACA were a strong indicator of the law’s positive impact on work comp. Later this week, NCCI’s Kathy Antonello will update us with a first look at the 2016 numbers, and we’ll see if that pattern continues.
I summarized the change in the employed population’s healthcare coverage a while back – noting that many more workers in high-frequency jobs are covered under ACA, a positive factor for work comp. (much more on this can be found here)
Wait, there’s more – Fitch’s just-released review of commercial insurance alluded to the impact of ACA on work comp…
Implementation of the Affordable Care Act (ACA) and a corresponding shift of individual medical care delivery away from workers’ compensation to other markets may also be a factor that bears further study.
Other research from Upjohn analyzes the impact of ACA on workers’ comp. A couple key points:
- immediately after workers turn 26 (and thus lose access to their parents’ insurance as allowed under the ACA), the amount of medical treatment paid by workers’ comp goes up – implying that lack of health insurance leads to greater use of workers’ comp benefits.
- the evidence strongly suggests that the ACA will decrease the likelihood that health care is paid for by workers’ compensation, the size of the cost savings to workers’ compensation is difficult to asses [because]
- the claiming behavior of people with minor medical needs is influenced by having health insurance. This would suggest that the overall savings to workers’ compensation would be modest. Heaton (2012), however, finds evidence that people with greater medical needs respond to health reform, which suggests that the cost savings to workers’ compensation could be large
There’s a lot more to the Upjohn analysis, and I’d encourage you to read it. Potential issues include access to care and the influence of lower Medicare reimbursement. That said, the authors’ overall summary strongly links ACA to lower work comp claims and medical expenses.
What does this mean for you?
Evidence strongly suggests ACA is positively affecting workers’ comp, lowering claims costs and medical expenses.