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A Future Unknown: The Patient Protection and Affordable Care Act (PPACA) and its Impact on Workers’ Compensation

As the Patient Protection and Affordable Care Act (PPACA) went into full effect in 2014, employers are beginning to take a keener look into how it will affect workers’ compensation. The difficulty in predicting any impact of the PPACA on workers’ compensation stems from the PPACA’s failure to directly address workers’ compensation. However, given the current provisions of the PPACA, workers’ compensation will certainly be affected, whether directly or indirectly.

The PPACA is estimated to facilitate health insurance coverage for an additional thirty million individuals across the United States. With more workers having access to health insurance, there could be less workers’ compensation claims. We have seen many cases where workers attempt to obtain treatment under workers’ compensation for injuries that are not work-related, and even some who admit that they do not have health insurance to cover the cost of treatment. We have also seen cases where workers allege a pre-existing condition that was aggravated by work activity. There are also cases where workers who have legitimate work-related injuries would try to stay on workers’ compensation for a longer period of time so that they can obtain treatment for non work-related conditions. Also, there are cases where workers cannot be adequately treated for their work-related injury because an underlying condition (for example, hypertension) is hindering proper and timely treatment.

With PPACA, since more workers will have access to health insurance, they may be less inclined to file workers’ compensation claims. Additionally, since the PPACA also instituted the Pre-existing Condition Insurance Plan (PCIP), which prohibits health insurers from refusing coverage because of a pre-existing condition, it is anticipated that there was be less aggravation/ exacerbation claims. Further, the PPACA creates incentives for employers to establish wellness programs to help improve the overall health of their employees. Along these lines, access to health insurance is expected to lead to healthier workers. Some workers may even be deterred by the workers’ compensation process (filing of forms, multiple court hearings, dealing with attorneys), knowing they can easily obtain treatment with their personal health insurance, and with much less hassle. As such, an overall decrease in workers’ compensation claims is expected.

However, it should be noted that there are some reasons why workers would choose not to use their health insurance, but instead continue to file workers’ compensation claims. High copays, deductibles and limited physician networks could drive claimants back to workers’ compensation where they do not have to worry about additional costs. Another reason is, some workers may simply want to stay out of work and receive indemnity benefits (while pursuing other jobs or activities, or just stay at home), which they would not be able to do using their health insurance.

While the PPACA is expected to have positive effects on workers’ compensation, it could also lead to increased costs for employers, which could possibly be offset by the reduced number of claims filed. Many are wary that with the increased access to health insurance, there will be a shortage of physicians, which would result in longer wait times for both initial and follow-up appointments, tests, and surgeries. The premise is, more access, more treatment, longer wait times. If this happens, workers’ compensation costs can be expected to increase as claim denials will take a longer time, treatment and follow-ups will be slower and more indemnity benefits will be paid out.

While the above are merely predictions of how the PPACA will impact workers’ compensation, they are very likely to become reality. Unfortunately, since the PPACA does not address workers’ compensation, absent any amendments to the law, we will have to wait and see how it unfolds over the course of the next few years.

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