Workers' Compensation and Obamacare Repeal

(WorkersCompensation.com) — Of course he tweeted about it.

With the repeal of Obamacare hanging on last-minute votes, swapping it from the Affordable Care Act (ACA) to the American Health Care Act (AHCA), President Donald Trump sent out a video message this morning. "Go with our plan, it's going to be terrific, you're going to be very, very happy," the president said. "Call your local representative, call your Senator, let them know you're behind our plan."

Standing before the Trump Administration earlier this week, Colorado rancher Carrie Couey was the only person out of 11 to blame Obamacare for her rising workers' comp cost while everyone else’s complaints were related to changes in healthcare and medical field policy. Couey said the "cost for workers’ compensation insurance for her business’ employees increased from approximately $17,000 per year to more than $70,000 per year."

The first thing Joe Paduda, principal with Health Strategy Associates out of Skaneateles, NY, points out is that Couey didn’t have the evidence to back her numbers. "The Trump Administration put these people up there and said Obamacare has been responsible [for insurance woes] and we are victims.”

"(Couey) said her workers’ compensation insurance for her employees went from $17,000 to $70,000. There is no evidence of that," Paduda said, adding the rise in cost could be equated to adding more employees, changing classification, or having a really bad few years which forced her ratings to go up. He also pointed how he reported two weeks ago in the L.A. Times in The Trump administration's bogus claim about Obamacare and workers' comp that rises in workers' comp premiums are unrelated to the ACA.

"A couple of things that came out in the L.A. Times piece is since ACA was implemented January 1, 2014, medical costs in workers’ comp have flattened out and actually decreased in one year. That is the first time we have seen that in the last 35 years. The correlation is not causation," Paduda explained, who said William Wilt, with Assured Research LLC, a research firm out of Madison, NJ, offers valuable insight into the matter.

"The emerging details of the AHCA and its’ likely impact on the medically insured leads us to conclude that the legislation is likely bad for workers' compensation insurers," said Wilt, who authors the Assured Research for the firm’s subscribers. 

"Our recent Assured Comment provides the background, but much of the support is gleaned from new, 2016 data showing the WC loss ratios in 18 states maximally-impacted by the ACA are now outperforming the rest of the country. Unwinding the impact of Obamacare and adding some 24 million to the ranks of medically uninsured will lead to cost shifting to WC insurers."

Paduda said he more than agrees.

"What we are also seeing is that premiums are based on claims costs, medical and lost wages. What we are starting to see now is premiums are coming down, and they are coming down more in the states that expanded Medicaid and that had the most state-run insurance exchanges than other states.”

And if there were another side of the argument, Paduda, who authors the Managed Care Matters blog, said, "a couple of things people say to challenge [ACA and workers' comp] is that the deductibles and co-pays are so high that people are not going to make claims because they can't afford the deductibles." But this just isn't the case, Paduda noted. "The argument of expanding healthcare under ACA has really positively affected workers’ comp cost for employers."

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