On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act (PPACA) into law. Known commonly as Obamacare, or the Affordable Care Act, the controversial legislation put healthcare changes into place that are widespread and far-reaching. And recently, experts on both healthcare and workers’ compensation got together in Philadelphia to discuss the potential impact of the changes on workers’ comp. The law is long and complex—over 1,000 pages in total. Thus, at the moment, especially while many of its provisions have still yet to come into effect, much of the theorizing is still only that.
The Affordable Care Act includes an intense focus on wellness programs and preventative care. According to one article (found here: http://www.propertycasualty360.com/2013/04/15/experts-ppaca-affect-on-workers-comp-not-known?t=workers-compensation), a healthier workforce will ultimately drive down premium costs for workers’ compensation, as insurers no longer need to provide as much care to as many people. And healthier employees means fewer accidents overall and improved workforce health, which can only decrease costs employers pay for worker downtime and inefficiencies.
On the other side of the cost curve, however, the PPACA brings large numbers of people into the health insurance market. If this puts a strain on doctors and facilities, insurers may have to charge more for their product—a result of increased demand and decreased supply.
Most directly, though, the law imposes a 2% tax on medical devices to help pay for some of the changes. This will ultimately raise $20 billion over 10 years. However, as these devices become more expensive, insurance companies may pass costs onto consumers, employees, and employers.
The abovementioned article notes that any physician shortage will also make it “difficult for patients to get treatment, meaning individuals may be out of work longer.” But this too is counterbalanced—the Affordable Care Act provides funding for medical schools and training.
Ultimately, to fully appreciate the effect the largest overhaul of American healthcare in decades will have on workers’ compensation, we will have to wait and see.
