The trend toward less generous employer-sponsored health coverage and increased employee cost sharing has increased the exposure of the workers’ compensation system to cost shifting, warns Jonathan Gruber. Gruber was the architect of the Massachusetts Health Connector a decade ago that served as the template for the health benefit exchange and individual and small group market reforms of the Patient Protection and Affordable Care Act. Cost shifting between the two systems occurs when, for example, an employee who sustains an injury or illness over the weekend and then files a workers’ compensation claim on Monday, asserting that the injury or illness originates in the workplace.
Heightening the tendency toward cost shifting is the difference in provider access between health and workers’ compensation insurance, Gruber notes, arguing that the two forms of coverage require greater harmonization. “If the workers’ compensation system stays behind, it will have the broadest possible network and the lowest possible cost-sharing, and it’s going to have people migrating into it more and more,” Gruber said in remarks to the Workers Compensation Research Institute (WCRI) in Boston reported by the Insurance Journal.
In 2007, then-California Gov. Arnold Schwarzenegger proposed as part of his health care overhaul (based on Gruber’s Massachusetts’s model) a “24-Hour coverage” pilot program that would have combined the medical treatment component of workers’ compensation with group health coverage. State and local government employees would obtain medical care through the same providers used in a state run managed care program for work and non-work-related health care, with an option for private employers to participate on a limited basis.
According to a report prepared that year by the California Commission on Health and Safety and Workers’ Compensation, at least 10 states adopted legislation permitting 24-hour care pilots but only two — Oregon and California – implemented them. Merging medical treatment coverage for care needs arising out either vocational or non-vocational circumstances can potentially reduce frictional costs and achieve administrative efficiencies, but has proven problematic due to various legal, institutional and cultural impediments.
Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email