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.
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.
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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