The Affordable Care Act (ACA) represents the first major overhaul of the American healthcare system in over three decades. Many welcome the reform as a way to extend health insurance access to millions of uninsured Americans. While there are many potential benefits to ACA, some in the industry worry about how it will impact workers’ compensation. Yet, there are also reasons to be cautiously optimistic.

Decreased Cost Shifting

Cost shifting happens when employees seek coverage under workers’ compensation for injuries received while not on-the-job—a source of legitimate concern for employers. This has been an attractive solution for the underinsured or uninsured who would benefit from workers’ compensation’s lack of deductibles, copays, and higher reimbursement amounts. This naturally results in higher expenses for employers. However, as a result of higher standards of care and greater access to care through the ACA, many observers feel that cost shifting will be greatly reduced as the current reforms mature, according to the Risk Management Monitor.

More Effective Care

One provision of the ACA that supports this prospect is the Patient-Centered Outcomes Research Institute (PCORI). This provision of the ACA seeks to increase the efficacy of patient care, thus minimizing the time a patient must spend receiving care and also allowing the patient to return to work sooner. This is in line with estimates that indicate that only 2% of the aggregate medical expenditure in the United States will be derived from those seeking medical services through workers’ compensation. This expectation is based on the experience of states that had previously enacted their own healthcare reform. For example, in 2006, the State of Massachusetts implemented its own reforms and, according to third-party firm Milliman and data obtained by the RAND Institute, workers’ compensation claims related to healthcare costs dropped 5%-10%.

Fast or Slow?

While some effect on workers’ compensation will eventually be observed, Michele Hibbert, Vice President of Mitchell International, believes any change in workers’ compensation as a result of the new ACA regulations will be slow. In a recent article in Claims Journal she cites information indicating that since the ACA will increase access to healthcare, more people will have access to a physician. This could mean healthier workers and thus less of a burden on workers’ compensation as many will elect to file claims with their insurance companies rather than their employers.

At Paradigm, we make a practice of knowing how these kinds of policy changes will affect our industry, our clients, and the injured workers whom we ultimately serve. To learn more or to keep abreast of the situation as it unfolds, you can visit our website or join the conversation on LinkedIn, Twitter, and Facebook.