The top three things that will affect workers comp in 2012

I did a talk last week at the National Association of Mutual Insurance Companies on the impact of reform and other factors on workers comp. It got me thinking about something a bit more specific – what’s on the horizon that’s going to affect work comp next year.
Here’s my take on three leading drivers.
Rise in the number of uninsured
We’ll see a rapid decrease in the uninsured population in 2014, but don’t expect the problem to improve until then. Employers have been reluctant to staff up, concerned that their business’ improvement may be temporary. If and when they do hire, they’re going to be reluctant to add the cost of health insurance, which is about fifteen grand per family and seven grand for individual coverage. With health plans increasing rates for groups large and small all around the country, health insurance is becoming even more unaffordable (and no, it’s not due to the health reform bill).
Couple that with the expiration of COBRA benefits that’s hitting more people every day, and the increase in the number of people with high deductible plans, many of whom have very few dollars in their HSA accounts and therefore are essentially uninsured for anything but catastrophic events, and you’ve got big problems for providers. Many of these uninsureds will still need care, which will lead to more cost shifting to soft targets – like workers comp.
Employees who have health insurance thru their employer tend to file claims more often than those who do not, but this appears to be a statistical relationship and not a causal one. However, if and when they do file, those without insurance are going to be more expensive to treat because their work comp payer has to cover all the care necessary to get them back to work, even if that care is not – strictly speaking – for the occupational injury or illness. Sure, the payer can refuse to pay for drugs to lower the claimants blood pressure enough to make it safe to do the shoulder surgery, but that would be pretty dumb.
Net is the more workers that have health insurance, the better for workers comp payers.
Running out of time this morning, so we’ll handle the other two tomorrow. They are:
The economy, and more specifically employment
As economic activity continues to trend upwards and hiring picks up, so will claims frequency.
The impact of MSAs
Pharmacy costs – and CMS’ treatment of same – are causing many payers to delay or reconsider settling claims.