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Work comp is worried about the wrong thing.

Finishing up the second survey report on the impact of COVID19 on workers’ comp and one takeaway has me shaking my head.

There’s a lot more fear and trepidation about presumption than I think is warranted. Across the 24 payers surveyed (including very large TPAs, insurers, state funds, and employers) there were less than 7,000 COVID claims accepted to date. Yes, several have considerable business in California, Kentucky, and Illinois and more than a few have a lot of health care and public entity clients.

Relatively few of those 7,000 claims are expensive, perhaps less than 5%. And even then they aren’t nearly as costly as real cats with expenses above $1,000,000. And this in an industry that is wildly over-reserved, like $10 billion over-reserved

There’s some – but significantly less concern over plummeting premiums driven by business closures and dramatic declines in payroll. That should be a lot scarier; we are talking billions of dollars of premiums lost, and the potential that figure premiums will not return to pre-COVID levels for a long time – if ever.

This will get worse as governmental entities are forced to layoff workers when sales tax revenues aren’t sufficient to cover payroll.

This is like worrying that your cable bill is going up when your salary’s been cut 30% and your hours reduced.

What does this mean for you?

Focus on the dollars, the pennies are just pennies.

4 thoughts on “Work comp is worried about the wrong thing.”

  1. Joe, good insight. Any statistics or studies concerning new exposures as WFH becomes “permanently” wide spread?

  2. Presumption for illness is a big deal maybe not now over covid 19 but there is a real concern that this is the proverbial camel nose under the the tent.Leading to a dramatic cost shift of health care expense going to workers compensation. I understand why. Failure of ACA to produce the cost savings projected has led to expanded out of pocket expenses for employees and their families. Be prepared to dust off your 24 hour plans.

    1. John – thanks for the note and good to hear from you.

      I don’t see that presumption is anywhere near the problem a devastated economy would be for workers comp. The Fed is calling for unemployment to remain near double digits through the end of this year, small businesses are dying by the thousands, and there are tectonic shifts in American employment.
      Re the ACA, it didn’t produce cost savings because the Republicans gutted every measure that was intended to do so – as I and many others have thoroughly documented.

      Don’t cut off a horse’s leg then whip it because it can’t run.

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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