Here’s what I see coming.

Quick take

Joe Paduda

What happens this fall and winter will bump up premiums, injury rates and claims costs. Insurers will see rising premiums; claims service entities, more work; and some insurers and reinsurers’ bottom lines will be hit hard.

Companies focused on servicing work comp patients in Texas and Florida are going to be very busy.

Hurricanes are the 'why'

Harvey, Irma and yet-unnamed storms are likely to make this the worst of all hurricane seasons, and we’re nowhere close to the end.

Harvey alone may cost close to $200 billion. With Irma — now a Category 5 hurricane with winds over 175 miles per hour — storm tracks favor a Florida landfall and we could be looking at a second blockbuster bill. (Note: Cost projections are all over the map.)

There are huge implications for the workforce, starting with public safety workers, moving to cleanup crews and workers making emergency repairs. Then comes rebuilding: residential, public, commercial and industrial construction, plus repairs to infrastructure.

Remediation will follow and take years. The huge petrochemical operations around Houston mean waterways and land will be seriously polluted.

And, hopefully, there will be big changes to storm and climate change mitigation planning, which will require major investments as well will mean billions in spending and lots of work for construction workers.

Roads, water and sewage systems, rail, power generation and transmission, pipelines, ports and terminals, and communications infrastructure all were hammered by Harvey, and Irma may be just as brutal.

Implications

• Higher payrolls — Hundreds of thousands of workers will be needed today, next month and for years to come. They will be working in high-frequency, high-severity jobs, and many may be poorly trained and supervised. And good, experienced workers will be costly due to supply and demand. It’s highly likely tens of thousands will be undocumented. Our governmental leaders will have to decide whether they are going to strictly enforce immigration laws or turn a blind eye. 
• Labor fraud — I’m betting a large percentage of cleanup and construction workers will be undocumented, which means a likely explosion in labor fraud. Unscrupulous employers will bid on cleanup work, knowing they can screw immigrants out of pay, and those workers have no recourse.
• Higher injury rates — Inexperienced workers putting in massive hours in dangerous places doing dangerous work equals lots of bad injuries, plus exposure to nasty chemicals and pollutants.

What does this mean for you?

We’re about to see the most significant change in workers’ comp in decades.

Joe Paduda is co-owner of CompPharma, a consortium of pharmacy benefit managers. This column is republished with his permission from his Managed Care Matters blog.