Affordable Care Act: What New York Could Expect

The impact of the Patient Protection and Affordable Care Act (PPACA) on workers’ compensation in New York (and across the nation) is unknown.  (See my previous article, “A Future Unknown: The Patient Protection and Affordable Care Act (PPACA) and its Impact on Workers’ Compensation” for a summary of the predicted effects).  However, the impact of the Massachusetts 2006 healthcare reform on the state’s workers’ compensation industry could be an indicator of what is to come for New York.

In 2006, Massachusetts reformed its healthcare system, which was used as a model for the PPACA, and therefore comprises many similar elements to the PPACA, including individual and employer mandates and low-cost plans. The state has seen some, albeit very few, impacts of the reform on its workers’ compensation industry. The RAND Corporation Institute for Civil Services conducted an analysis of the impact of the Massachusetts healthcare reform on the state’s workers’ compensation industry in 2012.  The analysis revealed that there has been cost-shifting from workers’ compensation to private health insurance.  While the analysis focused on hospital care, and found that billed charges and treatment volume per workers’ compensation claimant did not change markedly, the total volume of workers’ compensation billings (both inpatient and emergency room) decreased by 5 to 10 percent.  This is an indication that some injured workers may have chosen to use their private health insurance rather than file a workers’ compensation claim to receive treatment.  While this specific analysis is limited, and the Massachusetts workers’ compensation system is different from New York’s, it reinforces the prediction that New York could possibly see fewer workers’ compensation claims as the PPACA unfolds.

The PPACA was not created with the workers’ compensation industry in mind, as it does not directly address same.  However, since both the PPACA and the workers’ compensation industry center on healthcare, the impact is bound to reveal itself only with time.  Right now, Massachusetts remains the only realistic indicator of what New York could face in the future with the PPACA in full effect.  And, if this becomes a reality for New York, employers will be pleased ro see decreased workers’ compensation claims.

Reference: Heaton, P. (2012).  The Impact of Health Care Reform on Workers’ Compensation Medical Care – Evidence from Massachusetts.  RAND Institute for Civil Justice (www.RAND.org).

Tashia Rasul is an Partner at Lois LLC where she defends employers and carriers in New York workers’ compensation claims. Tashia chairs the Firm's Diversity Committee and is active in the national Alliance of Women in Workers' Compensation. She can be reached directly at trasul@lois-llc.com or 201-880-7213.