The Patient Protection and Affordable Healthcare Act (a/k/a Obamacare, or ACA) was signed into law on March 23, 2010. This piece of legislation has changed the way we think about healthcare in the United States. Among those changes is the “individual mandate,” which as of January 1, 2014, requires every person to obtain health insurance coverage or pay a tax based on family income.
ACA and Workers’ Compensation Programs
Since the implementation of the “individual mandate,” there has been discussion as to how the ACA will impact workers’ compensation insurance. On its face, the ACA does not change or alter the requirements of workers’ compensation insurance. However, there has been a lot of discussion as to the impact it will have as the workers’ compensation system is sometimes viewed as the “medical insurance for the uninsured.”
Goals of the ACA
The primary goal of the ACA was to expand coverage of healthcare insurance for the nearly 40 million uninsured in the United States. Other stated goals included:
- Expand access options to the insured and uninsured;
- Reform consumer protections in healthcare;
- Place added awareness of wellness and preventative services; and
- Fight the rising costs of healthcare delivery and insurance premiums.
The ACA has increased the number of Americans covered by healthcare insurance.
Changes in Massachusetts under Romneycare
In 2006, Massachusetts implemented changes to their healthcare framework by imposing an individual mandate similar to what occurred under the ACA. According to a study conducted by Jonathan Gruber who served as a consultant on this overhaul under Gov. Mitt Romney, the following trends were identified:
- Increase waiting times to see a healthcare professional/shortages of primary care doctors;
- Limited impact on driving down the cost of healthcare; and
- Questionable cost and claim shifting.
There are some who argue that trends identified in Massachusetts are not indicative as to what will occur under the ACA. This is based primarily on the premise that prior to their overhaul of that State’s healthcare system, there was a lower percentage of uninsured individuals as compared to the United States as a whole.
ACA and Workers’ Compensation Insurance
Given the radical changes to healthcare as a result of the ACA, it will take some time for claim management teams to understand fully the impact on workers’ compensation insurance. This is due to the result of the significant changes that will take place, the diverse background of the ever-changing workforce and other extraneous factors. There has been some speculation workers’ compensation programs will change as follows:
Claims shifting from health insurance to workers’ compensation
Experts are not certain if workers’ compensation will remain the insurance of last resort mainly due to increased engagement of Americans with healthcare insurance. Current trends suggest that many Americans who were previously uninsured are opting into lower cost, higher deductible healthcare plans and struggle to cover the cost of co-payments and co-insurance. As a result, it is speculated that this segment of the population will opt to receive care under a workers’ compensation policy. This may force claims management teams to take a more proactive (and costly) role in discovering fraud, waste and abuse within the system.
Cost Shifting
Now that the individual mandate has been fully implemented and the employer requirements to purchase and make available medical insurance for full time employees in 2015, more Americans will be covered by healthcare insurance. As a result, more people will likely seek medical care and treatment for chronic conditions that have gone untreated. Along with these increases in coverage, medical providers may seek to increase fee schedule reimbursement rates to offset the costs associated with subsidies for Medicare and Medicaid patients. There will also likely be an increase in demand for utilization review on services provided to injured workers.
Conclusions
While the ACA has been the law of the land since 2010, its impact has not been fully realized given the recent implementation of the individual mandate. Time will tell what impact it will have on workers’ compensation programs. As a result, claims management teams will need to proactively identify trends and continue to manage diligently their workers’ compensation file load.
Author Michael Stack, Principal of Amaxx Risk Solutions, Inc. He is an expert in employer communication systems and helps employers reduce their workers comp costs by 20% to 50%. He resides in the Boston area and works as a Qualified Loss Management Program provider working with high experience modification factor companies in the Massachusetts State Risk Pool. As the senior editor of Amaxx’s publishing division, Michael is on the cutting edge of innovation and thought leadership in workers compensation cost containment. http://reduceyourworkerscomp.com/about/. Contact: [email protected].
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