Does Affordable Care Act Repeal and Replace Mention Workers Comp?

March 14, 2017 By JL Risk Management Consultants

The Affordable Care Act Repeal and Replace – Any Mention of Workers Comp?

The Affordable Care Act Repeal and Replace is now working its way through Congress, Senate, and President. Last week’s WCRI meeting showed the Work Comp community’s concern over any Federalization of Workers Compensation (c).

Picture of Hands Carrying Baby Feet Affordable Care Act Repeal and Replace In Black Background

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Former Senator Tom Coburn and former House Member Henry Waxman both reiterated what most of the Federal Government confirmed in any meeting. The Feds are not that concerned over Work Comp. I think one of the two said “There are bigger fish to fry.”

I carried the inquisitiveness of the WC community when I read the two current pieces of legislation that are on the table. By the time I finish this article, another version will likely be in play.

Both versions are below:

Budget Reconciliation Legislative Recommendations Relating to Repeal and Replace of the Patient Protection and Affordable Care Act
SUBTITLE _ — REPEAL AND REPLACE OF HEALTH-RELATED TAX POLICY

Tax Affordable Care Act Repeal and Replace Paper

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These two pieces of legislation carry the main thrust of the repeal and replace moniker. If you search them for Workers Comp, WC, Workers Compensation, etc. you will come up with zero instances.

No one wants to fiddle with Workers Compensation right now. The level of concern will grow later when being able to sell insurance across state lines hits the airwaves. In other words, if an agent sells health insurance across state lines, workers comp may soon follow the same path.

WC has been villainized over the past few years as a possible failure or at least failing in its original mission. If that is true, then why do the Feds not act on it? Senator Coburn and House Member Waxman discussed the Affordable Care Act Repeal and Replace over and over again for most of their hour. Workers Comp took up approximately five minutes as the two gentlemen were at the WCRI Conference, not the AHRI Conference. (ACRI = Affordable Care Research Institute). < my apologies to WCRI. If not for the location, the two may not have mentioned Workers Comp at all.

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ACA Repeal Could Lead To More Workers Comp Case Shifting

December 7, 2016 By JL Risk Management Consultants

Will ACA Repeal (Affordable Care Act) Cause Case Shifting to WC?

The drumbeat for ACA repeal has grown much louder with the new administration just around the corner. This article on the new demands to keep Obamacare alive was an interesting angle from the health insurance sector.

Wikimedia Commons – Obama

Please read the article for all the information. The two main conditions were to:

Allow the subsidies for low-income insureds
A three-year unwinding – not an immediate cessation

In 2015, Dr. Richard Victor – then CEO of WCRI, presented the concept of case shifting from health to workers comp due to the lack of sufficient health insurance markets and other conditions.

After reading the above-linked article, one would have to say that if there is a sudden shift in the health insurance marketplace from the government abolishing the ACA?

One of the stark recommendations in the article was the penalty was too small to cause the younger employees to seek out and buy ACA policies. This scenario seems ripe for case shifting to WC.

Would Workers Comp actually become a bastion for the failing health care market?

Please follow the links to the prior article on Dr. Victor’s predictions. I had thought the concept was professorial and not real-world when I had first written about it. Possibly, I was the one that was eccentric to think this would never happen.

This would not be difficult to study unless more variables are in place that will affect WC over the next decade or two. We shall see.

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NCCI Affordable Care Act Analysis – With Political Twist

November 18, 2016 By JL Risk Management Consultants

NCCI Affordable Care Act Analysis Interesting Conclusion

The recent NCCI Affordable Care Act Analysis synthesized a very interesting conclusion. The National Council on Compensation Insurance is based in Boca Raton, FL. At first glance, along with this article, the NCCI estimated that removal of the Affordable Care Act would likely cost employers 3 – 5% in additional costs.

Certificate of Affordable Care Act Analysis emblem from website

Wikimedia Commons – Careilly5801

Dr. Richard Victor (former WCRI CEO) had performed an exemplary cost analysis of case shifting from health to Workers Comp, not vice-versa as was implied by the recent NCCI study.

The NCCI Affordable Care Act Analysis front page can be found here. One can likely draw the conclusion that a reduction in obesity by the existence of the ACA would cut Workers Comp costs. I could not wrap my head around that conclusion without reading into the study further.

When the word might appears in a study conclusion, I immediately look to see what statistical basis the conclusion was drawn from overall. The initiatives by the Affordable Care Act would supposedly reduce the obesity rate from 35% to 25% which could reduce WC costs indirectly.

Graphic Of Statistical Analysis Affordable Care Act Analysis Logistic

However, the obesity rates in the US have never been reduced, but instead have increased each year. I even perused the appendices to see if there was some type of statistical analysis drawn. However, there was just nothing there. Earlier this month, I had written an article on the associated study that the ACA does not crowd out WC patients’ access to care.

More reading and analysis may be required for me to draw any final conclusions. As of now, I just do not see the supporting statistics for the 3 – 5% reduction in Workers Comp costs. The NCCI Affordable Care Act analysis may be somewhere else on their website. I will keep searching.

Please note – I wrote this story with jet lag and being stranded in a foreign airport. If I missed something, please add in the comments section or email me. Thanks.

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NCCI Affordable Care Act Analysis – Interesting Study

November 3, 2016 By JL Risk Management Consultants

Venerable NCCI Affordable Care Act Analysis

The NCCI Affordable Care Act (ACA) study was taken from their Workers Comp Update 2016 Fall Edition (page 54 of PDF). Please note that this is a large file. If you are working in the Work Comp industry, it may be worth your time to download the publication. The NCCI (National Council on Compensation Insurance) is headquartered in Boca Raton, Florida. They provide Workers Comp ratings for approximately 40 states among many varied data services.

Analysis Presentation NCCI Affordable Care Act Of Woman Vector

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WCRI (Workers Comp Research Institute) has published a few articles and studies on the probable/possible case shifting caused by the ACA to Workers Compensation. In fact, Dr. Richard Victor (Former President) presented the WCRI’s findings at their 2016 Annual Conference in Boston. Dr. Victor inferred t there was some evidence, while preliminary, that due to the ACA, there was case shifting from health care to Workers Comp. You may wish to follow the links for further reading.

Leonard Herk, PhD, Economist, performed a hybrid study of the accessibility to Primary Care in the year before and after the enactment of the ACA. Dr. Herk examined the differences between urgent care treatment access in the years 2013 and 2014. Just coming up with a baseline for comparison was very unique.

Conclusion

The conclusion drawn in the study was that the ACA primary care treatment did not “crowd out” the availability of Workers Comp treatment in the same urgent care centers per each state. The ACA numbers included Medicaid, expansion in certain states.

Medical Set NCCI Affordable Care Act Icon

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The other side conclusion – 68% of the first 90 days of primary care treatment occurred in the first 10 days of a WC claim. That would be expected, as WC claims age, the likelihood of referrals to specialists away from primary care would increase heavily within the first month. (my conclusion).

I hope this NCCI Affordable Care Act study will be updated periodically.

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US Supreme Court ACA Decision To Affect Workers Comp?

June 17, 2015 By JL Risk Management Consultants

US Supreme Court ACA Decision Could Affect Workers Comp

The US Supreme Court ACA decision could easily affect Workers Comp. Let us call it the old Law of Unintended Consequences.

Badge Of US Supreme Court ACA Blue Backgroud

There are multiple articles on this blog concerning the Affordable Health Care Act (Obamacare) and its possible effect on WC.

For reference some of the articles are:

Would the Workers Compensation industry actually see a spike in claims if the Supreme Court guts the ACA? My answer would be an unequivocal – Yes.

I have always felt since working my way through the WC claims hierarchy that people are going to look under every stone to find some type of insurance coverage.

A possible scenario in this case would be that all of a sudden someone cannot renew their ACA-sponsored policy. Who could blame that person for attempting to file a WC claim to receive treatment for an injury that was originally treated under a health insurance policy? Desperate people do desperate things.

This is not to say these types of claims would ever be accepted by a WC claims department. However, if the claim is reported, the requirement of a full investigation will still use up a large amount of time for a claims department.

Wikimedia Commons – Careilly5801

The states and the Feds have all said they will bring in measures to keep health insurance alive for ACA policies.

However, would there not likely be a haircut of people covered as the health insurance carriers would only have to look at the Law of Large Numbers to see that a smaller group of health plan participants would prevent the risk being spread among a large enough group.

I am not advocating for or against the ACA. Numbers do not lie, unless you look at the wrong numbers.

One only has to look to the opinion proffered by Dr. Richard Victor- the outgoing Director of WCRI. He presented a very interesting slant on how WC and the Affordable Healthcare Act would collide with each other.

The US Supreme Court ACA decision is likely days or weeks away. In the words of Bananarama, it could be a “Cruel, Cruel Summer” if you work in a WC claims department.

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Top 10 Challenge Areas – Expanded Part I

June 19, 2014 By JL Risk Management Consultants

Top 10 Challenge Areas – The First Five

The article on the Top 10 Challenges for Workers Compensation received a large amount of inter-buzz.

Two readers suggested an expansion (better explanation) of my list. I will split the Top 10 into two articles.

The first five of My Top 10 areas of challenge are:

Harder market – without investment returns, WC cannot sustain lowering price pressures
Captives/Alternative Insurance – every company wants out of the current WC system
States that have legalized marijuana – now what does that do for the workplace?
Employers need to monitor next year’s premium
Affordable Care Act- the elephant in the room for any healthcare discussion

Harder Market vs. Hard Market

I rarely disagree with NCCI. However, a few weeks ago, the published an article on the underwriting cycle that I did not agree with overall. Investment returns besides a minuscule rate of rate on interest bearing accounts drive the insurance markets. To NCCI’s credit, the current situation with a low rate of return (interest) is not enough to sustain a market. The stock markets have been doing very well. Other than bonds, carriers can produce a great rate of return on premium dollars invested in the stock market in the long term.

If the stock markets take a hard downturn and the interest rates stay low deflation would rule the day. Carriers have nowhere to go for a decent rate of return. They will have to look to their policyholders which would equate to a hard market.

Captives/Alternate Insurance

As companies grow, there now seems to be a large push to examine other methods to find WC coverage such as captives, PEO‘s, and small/large deductibles. Alternative insuring arrangements does carry a large risk especially if a company is going to retain a large amount of the premiums. The alternative market must be examined with caution.

States That Have Legalized Marijuana

Wikipedia – Jonathunder

Two recent New Mexico court decisions have shined a bright light on the problem of marijuana in the workplace. California issued a similar decision a few years ago. If marijuana is prescribed medication by a physician, will it be considered the same as any employee that happens to be taking a prescription while on-the-job? Will an employee file a “drug discrimination” grievance in that instance?

Employers Overpaying Premiums At Policy Inception

There are many articles in this blog concerning the level of payroll decreasing for certain employers. If your company has a 20% reduction in workforce, why would you pay the same premium base as last year?

Affordable Health Care Act

As I have written so much on this subject, I will refer to this article (click on the heading) on how the changes in healthcare will affect WC.

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Affordable Care Act (Obamacare) Effects on WC – LIVE WCRI

March 13, 2014 By JL Risk Management Consultants

Affordable Care Act – Effect on Workers Comp- LIVE

The Effect of Th Affordable Care Act(Obamacare) on WC could be significant.

Dr. Richard Victor- (Will update during presentation until finished) – not edited until final version

Picture of Affordable Care Act Doctor and Patient Shaking Hands

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The effects of ACA on WC are: (could be):

Increased demand for medical care
Shortage of providers – when demand exceeds supply
Possible increased prices- basic market function when supply stays same and demand increases – remember the gas lines in the 1970’s?
How will WC system adjust to ACA? – use of Nurse Practitioners , Physician Assistants, Pharmacists, Podiatrists
States that will be affected more are ones that have opted-in for the Medicaid expansion
States may have to increase the appeal of their medical markets to recruit and maintain medical providers
Workers Comp overall pays more than health providers, especially Medicaid/Medicare

29% of all patients in Canada have to wait for even basic medical care

Workers Compensation has the indemnity benefit that will be lengthened – Will WC carriers pay more than fee schedule to reduce the indemnity benefits?

Surprisingly, there are many states where WC actually pays less than Medicaid/Medicare benfits – which may be the states where there could be a shortage of medical providers unless there is an increase in the fee schedule rates.

Patient Affordable Care Act Talking To Doctor

StockUnlimited

Contrast – Minnesota vs. Florida medical environment

Oregon Study – 30,000 people added to Oregon Medicaid program

Diabetes diagnosis was statistically significant
Cholesterol diagnosis was not significant
Depression was identified enough to be statistically significant
Bottom line – increasing medical coverage increases public health

States that have longer term use of opioids – Louisiana was #1 for long tern opioid use. Arkansas had highest surgical rates of any state.

Cost shifting – higher prices to WC as part of a shift in the general medical marketplace

Hospital mergers showed little statistical significance as they relate to increases in prices

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WCRI (Workers Comp Research Conference) – Reporting Live

March 12, 2014 By JL Risk Management Consultants

WCRI (Workers Comp Research Conference)

Workers Comp Research Conference reporting live.

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First Session is ACA (American Healthcare Act) effects on Workers Comp. Dr. Jon Gruber– Wow this conference is packed. Kudos to WCRI. Everyone from WCRI was very helpful and hooked me up to the hotel wireless system so I could do this live (way cool).

I am here as the press with a press pass. I just met Dr. Christine Yee – An economist with WCRI. She performed some of the Texas studies for WCRI. This is an interesting crowd. It is a mix of data, management and general WC personnel.

Who shows up to hear about Workers Comp statistics? I am seeing name tags from insurers. There are some off-the-record presentations over the next two days. I will likely not be able to live blog any off-the-record type of presentations.

This is an interesting change from the usual rating bureau conferences. Andrew Kenneally was nice enough to invite me for the last three or four years. I decided to show this year as WC is changing not quickly, but steadily.

I will update these reports as it goes through the next two days.

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Pay ACA Penalty File Workers Comp Claim For Medical Treatment

October 29, 2013 By JL Risk Management Consultants

ACA Penalty May Not Deter Workers Comp Claims

What if a worker decided to pay the ACA penalty and file a WC claims for medical treatment? The Affordable Care Act (ACA) may cause an unintended spike in Workers Compensation claims.

Wikimedia Commons – Careilly5801

One of the concerns over the years in claims departments is an employee substituting Workers Comp for health insurance. The ACA may also cause medical treatment rationing.Now that almost two million health policyholders that were previously insured have been dropped by their health insurance carrier, could Workers Comp become a safety-net type of accident insurance? Claims for many illnesses would be immediately denied by Workers Comp carriers .

The “Monday Morning” claimant is one of the huge red flags when a claim is filed for benefits. A very limited amount of ailments could be filed by reporting Workers Comp claims. Any home accident could be reported as a claim upon returning to work the next day.

Picture Nurse Preparing Syringe for Injection Focus on Syringe ACA Penalty Medical Treatment

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An adequate claims investigation will probably uncover the fact that the accident was not related to work. One of the best places to look is in the history of the injury as recorded by the original treating physician in his/her notes. One very obvious area is the original date of treatment. The date may not necessarily match the date of the injury.

Communication between the employer and physician will be tantamount to avoid having to pay for non-work related treatment. One of the Five Keys To Saving on Workers Comp Claims is having a designated original treating physician. Some states do not allow the choice of treating physician by the employer. Other states such as California allow for medical treatment panels or MPN’s.

A rash of Workers Comp claims may not occur due to the ACA. However, only two or three claims can wreck what was previously a good Workers Compensation program.

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Federal Government Shutdown’s Effect on Workers Compensation

October 3, 2013 By JL Risk Management Consultants

Federal Government Shutdown May Have Little Effect

Does the Federal Government shutdown have any effect on WC? The governmental shutdown was highlighted in a recent article in The Insurance Journal. I do agree with the author that the shutdown pertains to the federal level and Workers Comp, for the most part, is administered on the state level.

Picture Of Capitol Federal Government Building

Wikipedia Commons – Vcelloho

The ability of the Workers Comp markets to function without federal oversight or intervention may show that most programs are better served on the state level. The WC markets and systems would be in shambles if they were ever federalized when shutdowns do occur over the long term.

FEMA will even continue to operate the National Flood Insurance Program beyond any normal delays. A FEMA spokesperson confirmed there is little effect on the Property and Casualty markets.

Blog On Scrabble Federal Government With Pen And Paper

Wikimedia Commons – Sophie Janotta

One area the article alludes to is the federal debt ceiling. The financial markets could possibly feel experience a very shaky period if there is no agreement on the debt ceiling. Insurance carriers have experienced better than average returns on their investments over the last year. Any market or investment downturn would result in the carriers possibly raising rates to offset their short-term investment losses.

The bottom line is the P/C insurance industry including Workers Comp operates very well without federal oversight. Earlier in this blog, I had pointed out the push for federal licensing of agents, adjusters, and risk managers. The more areas that are federalized, the more the shutdowns will affect the insurance space in the future.

One future effect of the Affordable Care Act is there may be rationing of healthcare. Over time, the challenge of providing quick and applicable treatment options to injured workers may be a very tricky affair if the physicians’ offices are already maxed out with patients.

This type of treatment shortage may possibly be countered with more restrictive WC treatment networks where the injured workers would have preference over any other type of insurance.

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Law Of Large Numbers – How It Ruins Small WC Funds

October 2, 2013 By JL Risk Management Consultants

Law Of Large Numbers Catches Up To All Small Insurance Funds

The recent Affordable Care Act (ACA) going live is a reminder of how risk needs to be spread over a large numbers of participants to be viable.

Affordable Care Act Large Numbers Text Graphic

Wikimedia Commons – Careilly5801

The Law of Large Numbers is one of the concerns that the ACA is not really taking into account. The same thing has happened with many smaller Workers Comp funds nationwide.The Law of Large Numbers is an interesting yet simple way to show how risk needs to be spread over a number of insureds such as in automobile insurance. Workers Compensation requires the same type of larger pool of entrants so that the companies that are experiencing a bad claims year are offset by many safer companies.

There have been many adjustments over the years to guarantee that safe companies are not subsidizing the unsafe ones. The recent move by NCCI to double the primary loss portion of claims was put into place for just that reason. The WCIRB has turned their attention to smaller unsafe companies by removing any small company credits from their X-Mod equation.

Many self-insured funds and pools have felt the bite of The Law of Large Numbers. The pools were initiated with a small group of employers looking to add on others. Unfortunately, the employers had a large enough portion of their pool with bad claims years. The self-insured pool failed as there were too few safe employers in the group.

Picture Of Hand Holding Marker Pen Large Numbers With Dollars Growth

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Many participants in the self-insured pools have felt the sting many years after the funds were shut down due to assessments-after-the-fact. These types of self insurance pools are sometimes covered by any type of insolvency fund as exists with normal WC carriers.

We all shall see how the ACA (Obamacare) makes itself viable. However, one of the main groups that will carry the risk is the younger and healthier segment paying in, but only using a small part of the benefits. Twenty five percent is the projected rate of non-participation. However, the IRS fine is a premium payment of sorts for those 25%.

Carrier or self-insured insolvencies do not seem to be a hot news items as they once were less than 10 years ago. If you are interested in seeing which insurance companies or self-insured pools have become insolvent, there is usually a list provided by the state’s Industrial or Workers Comp Commission.

One great example is the North Carolina list of self-insured insolvencies that you can find here. NCSISA is one of the state associations that actually provide coverage for self-insured bankruptcies resulting in the inability to pay WC claims.

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Federalization of Workers Comp – Possible Game Changer

September 11, 2013 By JL Risk Management Consultants

Federalization of Workers Comp Marches On

The National Association of Registered Agents and Brokers Act of 2013 has just been again backed by the US House of Representatives. There are many articles and this blog first had coined the phrase – federalization of Workers Comp which has been picked up by many bloggers – some vehemently against the idea that the Feds are looking to nationalize WC.

Picture Of People Federalization of Workers Comp In US House Of Representative

Wikimedia – Susan Sterner

I always like to read the bills in their entirety to make sure there is nothing thrown in that has anything to do with the title of the bill. After all, I did read the Obamacare Act from front to back when it was finalized.

The excerpt provided a few concerns and questions. While agencies may need to be multi-state, why is there an inclusion of duties that are not performed by agents and brokers? The bolded text also covers:

Claims Adjusters

Risk Managers

Insurance Consultants

There is already a reciprocal agreement between most states for out-of-state adjuster licenses when adjusting files across state lines. I actually possessed eight state licenses a few years ago. As agents/brokers are not really allowed to tender file settlements, one has to wonder what is mean by the below text in bold.

Picture Of Hand Pointing Federalization of Workers Comp Membership Text On Screen

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This may never make it out of the House as the bill has been recycled three times before heading to the Senate. I could be over-reading the text. You may want to read the bill or at least the below summary.

I will follow this bill and blog on it if there are any changes.

The following is an excerpt of the bill:

Reestablishes the NARAB without contingent conditions as a nonprofit corporation to prescribe, on a multi-state basis, licensing and insurance producer qualification requirements and conditions.

Retains states’ regulatory authority over: (1) licensing, continuing education, and other qualification requirements of non-NARAB producers; (2) resident or nonresident producer appointment requirements; (3) supervision and disciplining of such producers; and (4) setting of licensing fees for insurance producers.

Authorizes NARAB to: (1) establish membership criteria, including a mandatory criminal background check of the producer’s Federal Bureau of Investigation (FBI) identification record for state-licensed insurance producers, and (2) deny membership to a state-licensed insurance producer on the basis of the criminal history information obtained, or where the producer has been subject to certain disciplinary action.

Prohibits NARAB from establishing criteria that unfairly limit the ability of a small insurance producer to become a member of NARAB.

Hand Holding Federalization of Workers Comp Blackboard Membership Concept

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Authorizes the NARAB to establish separate classes of membership and membership criteria, and requires it to do so for business entities.

Authorizes the NARAB to deny membership to any state-licensed insurance producer for failure to meet membership criteria.

States that NARAB membership authorizes an insurance producer to engage in the business of insurance in any state for any lines of insurance specified in the producer’s home state license, including claims adjustments and settlement, risk management, and specified insurance-related consulting activities.

Retains state regulatory jurisdiction regarding: (1) consumer protection and market conduct, and (2) state disciplinary authority.

Requires NARAB to: (1) receive and investigate consumer complaints, maintaining a toll-free telephone number; and (2) refer any such complaint to the state insurance regulator.

Authorizes the NARAB to coordinate with state insurance regulators to establish: (1) a central clearinghouse, and (2) a national database for the collection of regulatory information concerning the activities of insurance producers.

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PPO or MPN Network Where Paying More Is Goal

August 21, 2013 By JL Risk Management Consultants

PPO or MPN Network vs Supply and Demand

A PPO or MPN network where paying more remains the goal? This article is related to yesterday’s post on Obamacare and medical treatment rationing.

Picture Of Nurse Taking Patient BP MPN Network And Pulse

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A phone call from one of our long-term readers basically said that I was crazy to think that Workers Comp payors would ever pay MORE for Workers Comp treatment than the fee-scheduled amount.

As I mentioned yesterday, the basic economic model says that if the supply of something stays the same, but the demand increases prices will increase. The model has been in existence for over 300+ years. The model has been proven as accurate again and again over that span of time.

However, the basic economic model (by Adams) did not count on any governmental interference in the marketplace. The basic idea of rationing comes into effect when the government tries to keep prices in check by some type of price-adjusting plan.

The effect of price ceilings – which is the basic effect of Obamacare – is basically rationing. This is a great explanation using gasoline prices on how the government holding prices down would create a shortage. Some of us are old enough to remember the gas lines of the 1970’s. The PDF file may take some time to load. It is worth the read.

If healthcare prices are to be tamped down from the actual market, then the natural result will be rationing. The PDF indicates that one of the ways to work around shortages is a grey or black market where the same service will have a much higher price.

Wikimedia Commons – Obama

The going rate for medical network reductions is 15%. What if to have your injured workers seen timely you were willing to pay an extra 15%? Page 2 of the PDF points out that the seller, (medical provider) will get to choose whomever they will provide the service to overall. They would likely be the ones that are willing to pay the most.

The PPO effect of volume causing a discount in price would be thrown out the window as now the medical providers do not need the volume. Why would they take a 15% hit if the medical providers are going to not need any additional volume?

The 30% turn in additional medical costs would be staggering as 60% of Workers Compensation claim dollars are now being spent on medical.

This may not all come to fruition. Medical treatment rationing may never become a reality. However, if you are a risk manager, business owner, or medical provider, this is something that has to be part of your 5 – 7 year plan.

Could Obamacare Cause Workers Comp Medical Treatment Rationing?

August 20, 2013 By JL Risk Management Consultants

Medical Treatment Rationing Possibility

Would Obamacare cause Workers Comp medical treatment rationing? Over the past few years, I had commented very often on the interfacing of Obamacare with Workers Compensation.

StockUnlimited

The number one effect that seems to go unmentioned is the fact that medical care may (keyword may) be rationed overall.

My opinion is not based on any political agenda. It is based on the economic models of Adam Smith developed in the 1700’s – basic supply and demand. One of the hallmarks of the recent economic models (all based on Smith’s) is that if demand is increased for a good or service while the supply stays constant, the price will increase. However, if there is any type of governmental interference, then the whole market goes completely out of whack.

Governmental quotas, price supports, etc. have always thrown the market out of kilter. Would Obamacare be seen as the same type of governmental interference in the market? Supposedly, the numbers of “covered Americans” would approach 100%.

The basic Smith economic models says that when there is an increase in demand – more people seeking healthcare – while there are no more physicians or other healthcare providers being added, then where does that leave the injured Workers Comp patient?

Nurse Preparing Medical Treatment Rationing Syringe Injection

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What happens if instead of seeing the physician monthly all of a sudden all Workers Comp patients could only been seen bi-monthly? If a carrier/employer/self insured is paying temporary total benefits, this could be a very vexing problem.

If I was an adjuster, that would drive me totally bonkers. The part of my caseload that was drawing benefits would now be competing with the 100% -covered Americans. Would a boutique network established with for instance, an orthopedist, let my injured workers be seen more often?
The boutique WC network would be a carve-out of a network while an insurance carrier or TPA would pay MORE to have their injured workers seen on a timelier basis.

Of course, none of this may come to fruition. Many articles have been published where Obamacare may not actually cover 100% of Americans. Regardless, there will still be a larger number of people competing for those medical care slots.

Affordable Care Act Mentions Workers Comp How Many Times?

May 30, 2013 By JL Risk Management Consultants

Affordable Care Act Mentions Workers Comp __ Times?

I am one of the people that actually read the Affordable Care Act (Obamacare) just after it was passed by the House. The main reason was to see if Workers Comp was affected or mentioned directly in the Act.

Graphic of Affordable Care Act Obamacare

Wikimedia commons – Careilly5801

The searchable PDF of the act is on the Affordable Care Act page. I had thought there would be more reference to Workers Comp. The term was covered only one time. The following is the excerpt from the Act:

COMPLIANCE WITH CERTAIN LAWS.—A State shall ensure that, regardless of whether the State uses an agency provider model or other models to provide home and community-based attendant services and supports under a State plan amendment under this subsection, such services and supports are provided in accordance with the requirements of the Fair Labor Standards Act of 1938 and applicable Federal and State laws regarding—
‘‘(A) withholding and payment of Federal and State income and payroll taxes;
‘‘(B) the provision of unemployment and workers compensation insurance;
‘‘(C) maintenance of general liability insurance; and
‘‘(D) occupational health and safety.

Doctor And Patient Affordable Care Act Looking At X Ray

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I had written many times before on the Federalization of Workers Compensation and the Death of Workers Compensation specifically mentioning 24 hour healthcare as a replacement for WC.

The above section may allay some of the fears that Workers Comp personnel may have on the Affordable Care Act. However, I would read the articles that I had written in the past before feeling too comfortable.

I read the passage a few times to try to comprehend how this all fits together. If anyone would like to leave a comment on their interpretation, please feel free to post a comment. Any input would be appreciated.

2018 Update – part of the Act has been repealed. The effect on Workers Comp will not be known for at least two years.

Five Ways ObamaCare and Workers Comp Are Similar

January 17, 2013 By JL Risk Management Consultants

Five Ways ObamaCare Could be ObamaComp(c)

The five ways Obamacare and Workers Comp are similar may come as a shocker. The Wall street Journal very recently published an article on how the Affordable Care Act will affect health insurance premiums. There seemed to be a few items in the Act that sounded very similar to Workers Comp.

Wikimedia Commons – Obama

The first similar component is health insurance costs and Workers Comp medical treatment fees both being indexed or based on the Medicare/Medicaid fee schedules. A large majority of states now use fee schedules to reimburse providers for medical treatment.

The second similarity is in states with no fee schedules, the Usual and Customary charges are indexed on a Zip Code or address. The Usual and Customary charges seemed to be very similar to the community-based pricing requirements of the Affordable Care Act.

The final three comparisons are best compared by an excerpt from the article. The following three components reminded me of the same Workers Compensation insurance requirements.

Central to ObamaCare are requirements that health insurers

Accept everyone who applies (guaranteed issue)
Cannot charge more based on serious medical conditions (modified community rating)
Include numerous coverage mandates that force insurance to pay for many often uncovered medical conditions.

Workers Comp insurers have almost the same requirements:

Accept everyone that applies indirectly as all employees are covered. Workers Compensation insurance is a guaranteed issue policy of sorts
Cannot charge more for employees with serious pre-existing conditions. Workers Comp insurers cover the employees regardless of prior medical condition
Are sometimes forced to cover injuries that may have not been work-related

Obama or Romney – Vote For Workers Compensation?

November 6, 2012 By JL Risk Management Consultants

Workers Compensation Vote – Obama or Romney

Workers Compensation – would a vote for Obama or Romney be a vote for our industry? Well, we are finally here. I will miss the droning on off all the commercials. I live a battleground state so they airwaves and internet were flooded with so many irritating advertisements.

Wikipedia – The White House

In my humble opinion, there will be no difference if Obama retains or Romney acquires the Presidency. The main races that will heavily affect your Workers Compensation rates, laws, etc. are in the state races.

Workers Comp is a very individualized insurance offering. We can see that phenomenon when we compare , for example, California to Nevada or Oklahoma to Texas. One size does not fit all. I think that Workers Comp could be regionalized across zones of a type, but not across the United States.

Vector Graphic of Voting Concept Obama or Romney Workers Compensation

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I coined the term – and it has been copied by other bloggers – on the Federalization of Workers Compensation. I had thought that the current administration would march over the top of WC and make it a federal program. That was not necessarily an error on my part.

Obamacare does not directly affect the Workers Comp industry. However, what was a wide river to cross is now a small stream. In my opinion, 24 hour healthcare (including Workers Compensation) could be easily attained by using the AFLAC model with some type of partial payment by the employee and a subsidy by the employer.

Often I am asked by many investing companies on consultations what would be the unknown factor that could cause Workers Comp market to change. I think it COULD be the healthcare companies absorbing the Workers Comp market.

I am often asked as to why this would happen. As well all know, the healthcare companies will now be limited as to profit in the health insurance market, but not Workers Comp or even the Property & Casualty markets.

Picture of Physician On Screen Health Obama or Romney Healthcare Companies

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I am still under the impression that your State Senate, House, and Governors’ races will be the ones that will map out the Workers comp markets in the future. That is why I recommend looking into the candidates’ prior voting records on any bills that involved any type of insurance matter.

The bottom line is that whether President Obama or Governor Romney wins the election will not matter to Workers Comp except possibly to a very small degree. Your local state races will make the difference.

I have consulted on all states Workers Comp in the nation. Each state is unto itself on Workers Compensation. The one word to watch out for is reform as most of the time this means a major change to how you will do business in the WC industry.

Even though Workers Comp is the silent budget buster, for some reason it does not draw enough attention. On the Federal level, that may be a blessing in disguise.

Obamacare And Its Effect On Workers Compensation

July 2, 2012 By JL Risk Management Consultants

Obamacare And Its Effect On WC

The Obamacare And Its Effect on WC. Obamacare has hit the airwaves very heavily due to the SCOTUS’s decision last week. Can Obamacare’s influence even reach into the Workers Comp world? I stepped into the fray in 2009 by coining the term from the result of Workers Comp interfacing with Obamacare as Obamacomp. I wrote this article on Obamacomp almost three years ago.

One of the most read articles in this blog is on The Death of Workers Compensation that I wrote over two years ago. I received very angry emails from the article. I meant the article as a wake-up call to Workers Comp insurance personnel to be flexible and to attain as much education as possible.

I recommend WC begin looking over health and long-term disability information. This would provide a background into the health area in case Workers Compensation is federalized into Obamacomp.

If Obamacare survives through the next voting cycle, the idea of Workers Comp being provided on a 24-hour health policy with an add-in of disability payments could be a viable alternative when examined by the Federal Insurance Office. The FIO has really s

tayed away from interstate insurance transactions. I think they will expand into the area in the next 5 – 7 years.

Wikipedia – Pete Souza

The AFLAC model is a very easy way to look at how the payments and healthcare would be administered if more of Workers Comp was federalized. AF

LAC does provi de medical and disability payments to persons that have enrolled in one of their policies.

I have read in some of the LinkedIn posts and in a few articles that medical payments for Workers Compensation would lessen as with Romneycare in Massachusetts. I would have to disagree as there were heavy WC reforms enacted in Mass in the same time period as Romneycare.

The other difference is the scale of just one state as compared to a nationwide change. If WC medical payments do decrease, it will be a much needed break for employers.

How Obamacare Could Ruin Your Workers Comp Program

May 17, 2012 By JL Risk Management Consultants

Your Workers Comp Program Can Be Ruined Very Easily

Does your Workers Comp program seem to be in ruins? Obamacare could ruin your program if you are not careful.

One of the most obvious trends in the Workers Comp environment is that health insurance is trumping the attention paid to employers’ budgets. Who can really blame employers for hinging their decisions on the upcoming Supreme Court result?

Drawing Of HealthCare With Dollar Sign And Arrow Workers Comp Program Obamacare

The one under-the-radar concern that I have is Workers Comp has taken a back seat (or possibly in the trunk) to the health insurance discussions. With the changes occurring with Workers Comp E-Mods for 2013, 2014, 2015 and beyond, Workers Comp should very likely not be a forgotten matter.

Safe workplaces are going to reap the harvest in the next few years. Unsafe employers are basically going to pay the price over the next few years. In a way, they will be subsidizing the safe employers when compared to the present Workers Comp system.

For instance, one of our larger current clients is having a 300% increase due to a change in one of their classification codes by their current carrier. If there was too much attention paid to other areas (and we were not a consultant for them), this increase may have slid through unnoticed. The client was able to change most of their employees back to the original class code. They were very happy with the result.

There are many posts involving saving on your Workers Comp program in this blog. Feel free to use the search box on the right side of the page or look in the archives for articles.

Obamacare could ruin your Workers’ Comp program, but not if you pay attention to the changes in health and workers comp insurance.