Workers' comp and Medicaid are intertwined.

Joe Paduda

First, a few factoids about Medicaid:

• One out of four Americans is covered by Medicaid.
• Medicaid accounts for about 17% of U.S. medical spend (work comp is about 1%).
• It is very state-specific; states have a lot of control over who and what’s covered.
• Federal and state funds pay for Medicaid, with the feds covering about 62% of total costs (on average).
• Most Medicaid recipients don’t pay deductibles, co-pays, 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.

Some 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, and 15% have a part-time worker. 

Only one-fifth of recipients’ families have no one working.

Many employers that don’t provide health insurance or aren’t required to provide health insurance under the Affordable Care Act recommend that 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 that Medicaid expansion increased employment in states that expanded Medicaid.

More employment equals more payroll equals 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?

Workers’ comp has done quite well since the ACA’s full implementation; reductions in Medicaid will almost certainly have the opposite effect.

Joseph Paduda is the principal of Health Strategy Associates, a consulting firm focused on improving medical management programs in workers’ compensation. This column is republished with his permission from his Managed Care Matters blog.