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Federal/State Health Exchanges Could Be Used For Workers Comp


Federal/State Health Exchanges Could Become Modified PPO

Could Health Exchanges be used for Workers Comp markets?   The Death of Workers Comp is one of the most read posts on this blog.  I still receive a few emails  disagreeing with it in total.  The Federalization of Workers Comp was a term that I pieced together over five years ago.  The main theme is that employers, insurance personnel. agents, vendors, and any type of person or entity that are related to Workers Comp should be very flexible over the next few years.

Picture of Physician Touch Screen Health Exchanges Concept

The Federalization of Workers Comp and the subsequent changes may sound like rubbish or outlandish thinking on my part.  To that, I say –  could you have seen a federalized healthcare system 10+ years ago?   The answer for the majority would be a resounding – No.   The failure of Hillary Clinton’s healthcare package seemed to answer the question.

I wrote this comment over 3 years ago – “With the advent of a federal healthcare system, nationalizing Workers Comp progressed from crossing a wide river to stepping across a small stream.”

Health insurance has always been the leader in claims processing techniques,; PPO medical treatment networks; claims information systems; market reactions; and of course adjusting premiums to fit the market.   Property Casualty insurance , especially Workers Comp, has lagged behind health insurance approximately seven to 10 years.  Health insurance provided quite a large amount of the blueprint for Workers Comp.

No one knows exactly how the health exchanges will work.  Some states have opted out while some have decided to pursue partnerships with the Federal exchanges.   Theory is one thing, application is another.

How much of a change would be necessary for a state or federal health insurance exchange to just add Workers Comp in as a coverage or 24 hour healthcare?  Twenty four hour healthcare has been attempted in a few states with very negative results.  In my opinion, the resulting failures were due to a violation of the Law of Large Numbers.

Unless I am mistaken, the state/federal exchanges would provide the large numbers needed to sustain 24 hour healthcare or a Workers Comp market.  The small stream to cross would not be that difficult to envision.

Hand Presenting Email Health Exchanges Icon

One of the emails I received on this subject was that Congress does not consider that a large enough subject to even attempt to legislate.   I agree with that statement.  However, your State Legislature may be a different matter.  As we all know Workers Comp is still ruled by laws that are specific to each state.

What conclusions do I draw from the upcoming exchanges?  I have one main one.  If you are not willing to be flexible and further your insurance knowledge,  you may be left behind in the very near future.  I have stated that Workers Compensation is a stable market.  The stability could end up in a different area of Workers Comp from where you are now.  This also applies to employers.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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