Today’s shifting political landscape brings many challenges, including planning for the future. The new administration has repeatedly promised to repeal the Affordable Care Act. There are 20,000,000 Americans who currently have insurance purchased through the Affordable Care Act, and a total repeal will undoubtedly have sweeping effects. These effects would extend to an impact on workers’ compensation.
Under the Affordable Care Act, workers’ compensation paid out fewer claims. In 2014, medical costs only rose by 3%, and in 2015, the costs dropped a percent. One reason this probably happened is so many more people had health insurance, due to the Affordable Care Act. As a result, workers’ compensation had to pay out fewer claims. This is because in cases where an uninsured, injured employee had non-injury-related conditions that had to be addressed as part of a treatment plan, workers’ compensation had to pay for the entirety of the treatment plan. However, where the worker had insurance, the worker’s health insurance would take over the portion of the treatment costs attributable to the non-injury related condition. Because so many more people have health insurance due to the ACA mandate, this means that the amount of workers’ compensation claims paid out decreased.
The President Elect and other Republicans have frequently promised to do a wholesale repeal of the ACA, which would include the individual mandate. If this happens, there would be definite effects on the workers’ compensation system. Without the individual mandate and the accompanying premium subsidy, many workers may drop their health insurance. This could lead to a higher burden on the workers’ compensation system. Another factor could be that typically people with health insurance are healthier than people without health insurance. This is because those with health insurance are more likely to seek medical care for their conditions or injuries. Without health insurance, it is more likely that an injured worker would have the extra health issues that a treatment plan under a workers’ compensation claim would have to treat. It is not clear exactly how much the ACA has reduced the cost of workers’ compensation claims, but logic dictates that it certainly has been a contributing factor.
The future for the ACA and workers’ compensation is unclear. If you have questions about your business’s workers’ compensation liability and future or current legislation, call me today at (714) 516-8188 for an appointment. We can talk about your business and your future.