Tag Archives: health insurance

Trump Policies Bad for Workers’ Compensation

Dr. Richard Victor

Dr. Richard Victor, an economist who founded the Workers’ Compensation Research Institute (WCRI) 35 years ago, just presented a paper at the WCRI National Conference in Boston.  He indicated that federal policies on immigration and health insurance promise to make worse the challenges the United States faces by an aging workforce and a widespread labor shortage. He noted that workers’ compensation claims could double and overall costs could expand by over 300% in the next dozen years, without any increase in benefits to workers.  External forces could bring far more cases into the system because of a number of forces, including an aging workforce, labor shortage, slowdown in immigration, and more shifting to workers’ compensation claims that should be paid by group health insurance. Dr. Victor projected current claims out a dozen years to 2030 indicating that claims should actually be down to about ¾ of today’s numbers, but external factors will more than overtake that favorable percentage. Labor shortages caused by baby boomers retiring will increase injury rates.  Research indicates that the older workforce will mean an increase in lost work days and more injuries and a real impact on labor shortage as more baby boomers retire. Dr. Victor indicated “These labor shortages, which will be longer and deeper than anything we have experienced, will lead to significant increase in workers’ compensation claims and longer durations of disability.” During a period of labor shortages, employers relax hiring standards and hire workers they would not have hired in a normal labor market, including workers who are less capable. The overall labor shortfall leads to more workers’ compensation claims.

The Immigration Factor:

Economists have seen immigration as a factor that mitigates against the impact of the labor shortage. The Trump Administration, changing federal immigration policy, will further tighten labor markets and prolong the duration of a labor shortage. Moreover, Trump’s “anti-immigration rhetoric” also discourages people to come to America.  In health care, Victor noted that one in six health care workers is foreign-born including 27% of physicians and surgeons, 15% of nurses, and 22% of home health aide, each of which effects the workers’ compensation system.

Health Insurance

A shortage of people with adequate health insurance is also a problem for workers’ compensation. Health insurance deductibles have risen from the hundreds to many thousands of dollars, and this new reality causes more workers to go without or delay getting medical care for an injury or illness. When they can no longer ignore their condition, many claim it as a work-related condition and seek workers’ compensation (he cited a Rand Research study indicating workers with high deductible or co-insurance plan postponed care in over one-third of cases of the most common kind of workers’ compensation claims – soft tissue injuries.” As the number of workers who lose their insurance grows (since the Trump Administration and Congress ended subsidies and other aspects of the Affordable Care Act) case shifting form health insurance to workers’ compensation could have a major effect, ballooning workers’ compensation claims by as much as 35% in the next dozen years.

Victor’s conclusion: “You end up with a 300% increase in workers’ compensation costs without increasing benefits to injured workers.”

 

Wisconsin High-Risk Insurance Program Closing Down

I read with bittersweet thoughts that the state’s high-risk insurance program was winding down, in anticipation of the implementation of the insurance exchanges through the Affordable Care Act (“ObamaCare”).  Health insurance–or lack thereof–is crucial to the lives and health of injured workers.  In this space, I’ve written in the past about the problems faced by workers without health insurance.  

There is no provision under the Wisconsin worker’s compensation system that requires an employer to continue an employee’s health insurance while recovering from a work injury.  Also, if a claim is denied and the worker is terminated (a situation that happens all too frequently), the employee generally loses health insurance coverage because continuing COBRA premiums is too costly.  Of course, there are also the multitudes of workers that simply have no employer-provided health insurance at all.   In all of these situations, an injured worker may be faced with the situation of needing medical treatment for their injury but unable to get it without insurance.

In many of these situations, some of my clients have turned to the Wisconsin Health Insurance Risk-Sharing Plan.  If these workers were not eligible for Medicaid or Badger Care, then “HIRSP” was a potential safety net that allowed for health insurance coverage.  With some coverage, the injured worker could at least pursue some medical care.  For me, seeing that beneficial program fade away hurts.

The bright side is the hope of ObamaCare and increased access to health insurance.  Now, our governor’s short-sighted (or politically-calculated) decision to reject the expansion of Medicaid coverage may hinder this expansion–and cause some further confusion.   The key, however, is further hope.  If an injured individual is without insurance, a downward spiral can happen fast. Regardless of whether someone’s disability is work-related or not, if they are hurting, access to medical care should be a right.