Workers comp and Medicaid are intertwined.
First, a few factoids about Medicaid.
- Medicaid accounts for about 17% of US medical spend (work comp is about 1%)
- It is very state-specific; states have a lot of control over who and what’s covered.
- both federal and state funds pay for Medicaid, with the Feds covering about 62% of total costs
- Most Medicaid recipients don’t pay deductibles, copays, or co-insurance. (Indiana is one exception)
- Medicaid covers millions of people in working families.
Let’s dig into this last datapoint, as it has implications for workers’ comp.
63% of Medicaid recipients have at least one family member working full time. This varies among states, from 77% in Colorado to 51% in Rhode Island. 15% have a part time worker. Only 19% of recipients’ familes have no one working.
Many employers that don’t provide health insurance &/or aren’t required to provide health insurance under ACA recommend workers who qualify sign up for Medicaid.
Implications…
- More workers are covered by Medicaid now than were pre-ACA
- Medicaid’s health “benefits” are similar to work comp
- Claiming behavior may well be influenced by coverage status
Next, employment.
Most credible studies indicate Medicaid expansion increased employment in states that expanded Medicaid.
Implications
More employment = more payroll = more workers’ comp premium and more claims (NOT higher frequency, which is a percentage and not a raw number)
There are a number of other benefits for states that expanded Medicaid – an excellent summary of all available research is here.
What does this mean for you?
Watch what happens with the GOP’s efforts to “repeal and replace” ACA. Workers’ comp has done quite well since ACA’s full implementation; reductions in Medicaid will almost certainly have the opposite effect.
Note – if you want to argue or discuss, fine – cite sources and data to support your assertions.
Joe:
As always, you are absolutely right!
We have gone from 60 million Americans on Medicaid prior to ACA to 72 million folks on Medicaid since ACA.
The growth has come predominantly from those states that have expanded Medicaid as a result of ACA, allowing
non-elderly, non-disabled, non-parent adults with incomes up to 138% of Federal Poverty Level (FPL) eligibility.
As a result, the overwhelming majority of individuals who have become eligible for Medicaid since ACA are in fact the working poor, individuals who are working but making less than 138% of FPL.
Just for comparative purposes, in those states that have not expanded Medicaid under ACA, Medicaid eligibility is very restrictive. For example, AL allows adults on Medicaid with income of less than 18% FPL, TX less than 19% FPL, MO less than 23% FPL, LA and IN less than 24% FPL, ID less than 27% FPL, MS less than 28% FPL, and in my own home state of FL, less than 34% FPL.
It is not a coincidence that allowing individuals who are working eligibility for Medicaid has meant better numbers and better results for the work comp industry.
To make this absolutely clear, all you have to do is look at the economics of the situation. 2016 Federal Poverty Level
for 1 person is $11,770. 138% of FPL is $16,242. This is $1,353 monthly or $314 weekly. Therefore, if an injured worker residing in one of the 32 states which has adopted ACA Medicaid expansion is receiving less than $312 of work comp benefits on a weekly basis, or working and earning less than $312 on a weekly basis, he or she would become eligible for Medicaid, providing him or her with medical coverage.
Injured workers residing in the 18 states which have not adopted ACA Medicaid expansion receiving or earning the same amounts would not become eligible for Medicaid, therefore having to rely more heavily on the work comp medical system for all of his or her medical care, whether related or not to the work comp claim.
ACA has helped the work comp system. Repealing it will hurt the work comp system.
As always, appreciate your leadership on these issues and bring it to the forefront for all of us to think about.
My very best wishes for a wonderful holiday season to you and yours.
Rafael Gonzalez, Esq.
President
Flagship Services Group
Great information and challenging thoughts as always, Joe. No argument ACA has positive implications for WC (increased wellness yields better employees, etc..) and most experts say the good aspects should/will remain in place. But should we really be isolating Medicaid and draw conclusions on the WC impact, especially given the limited number of states involved (only 32, right?). Also, ever wonder why the worst performing WC states are all Medicaid expansion states (CA, IL, NY, CT, etc…)??
Following your request for data/sources, Bob Hartwig\’s last lightning round overview of WC may differ with many of your stretch conclusions (WC trends start on page 66)
http://www.iii.org/sites/default/files/docs/pdf/workerscomp-051016.pdf
As you have graciously referenced before, Bob\’s whirlwind presentation has demonstrated that there are countless influencers impacting WC results (if you have sat thru his presentations you know exactly where I am coming from). So are we over-emphasizing a government program as \’the\’ topic for discussion and analysis? Common sense tells me that the biggest impact on WC comes from the great professionals in our industry, not some government program — the individuals that bust their butts every day to drive down both the frequency and severity of WC incidents so less employees get injured and those that do get the best medical care possible. I know that it\’s not as much fun as the politics and fighting associated with the success or future death of the ACA, but think we can find more common ground and solutions around controlling our own destiny focused at impacting WC trends.
John
1. I have referenced multiple ways ACA had influenced work comp over the last few years in multiple posts.
This post was specific to Medicaid and work comp and alluded to the overall impact of Medicaid expansion. Most work comp people are not familiar with Medicaid thus the explanation.
2. Where in hartwig’s presentation does he discuss reasons for medical cost moderation? I found nothing in that presentation or his NCCI version that refuted or even addressed this issue.
3. Yes 32 states have expanded Medicaid and 19 have not. Again, that does not refute my central thesis. As to your statement that some Medicaid expansion states are poor work comp performers, I don’t follow the argument. What criteria do you use to define poor performance?
4. Your point re all work comp adjusters etc somehow discovering how to manage medical after a hundred years of no success is not convincing.
In point of fact, there is precious little new on that front of late, and certainly nothing system-wide that would explain even a part of this sea change.