Workers’ Compensation Could Pay If Obamacare Replacement Falls Short

The workers’ compensation system could end up feeling some pain if changes to health care and other social insurance programs by Congress and the Trump Administration mean some Americans lose benefits, workers’ compensation professionals were told on Thursday.

Replacing Obamacare, or the Affordable Care Act (ACA), as Republicans want to do will be a difficult task, agreed two former elected officials and political opposites who addressed the Workers Compensation Research Institute (WCRI) annual conference in Boston.

Former U.S. Representative Harry Waxman, Democrat of California, one of the framers of the ACA, told the roomful of workers’ compensation experts that divisions among Republicans are likely to get in the way of an effective compromise on health care.

Former U.S. Senator Tom Coburn, Republican of Oklahoma, told the same group that while he believes Congress will pass something, whatever bill passes probably won’t attack the real problems plaguing the health care system.

As differences grow among Republicans over what to do about health care, Congress is looking to defer to President Trump but Trump isn’t providing the leadership needed to arrive at a compromise, said Waxman.

“Republican leadership is excited to have a Republican president because they feel that President Trump is going to defer to them on legislation including on the Affordable Care Act and that seems to be President Trump’s approach. But there is disagreement on what to do on the Affordable Care Act among Republicans and in order to reconcile their differences they are looking to the President to be the leader,” Waxman said. However, he said, he sees no attempt by Trump to reach out or provide that leadership.

Coburn said that Congress too often defers to the executive branch because it is “lazy” and lawmakers frequently pass legislation without knowing all the details or even what is in some bills.

In the area of health care, Coburn predicted Congress will pass a bill similar to what is known as the Burr-Hatch-Upton proposal. This 2015 Republican bill, also known as the CARE Act, keeps popular ACA features including pre-existing condition protections while eliminating the individual mandate, allowing individuals and small business employees to use tax credits to purchase insurance, capping Medicaid funds to states, and reforming medical malpractice laws.

But Coburn suggested that whatever Congress and the Trump Administration manage to do will be ineffective unless they also make the health care system more transparent and let market forces work.

“The problem with heath care is there is no transparent market. You can’t see what you’re buying,” said Coburn, who is a medical doctor. He said the government needs to force health care providers to publish their prices and outcomes.

“Until we get a real market, it isn’t going to matter what the government decides, it’s going to continue to be truly inefficient,” said Coburn. “We need to fix the real disease, not the symptoms of the disease.

“Until you force publication of prices and outcomes, so you can create a market, whether you have a government-run program or a private program, you are never going to allow the purchasing power of the dollar to allocate scarce resources properly.”

Waxman said he’s not the only one worried about what may replace the ACA.

“Republicans are worried about it as well because they have to figure out what to do because they have been campaigning for years to repeal and replace but never put forward a replacement,” he said. “And I don’t think they can do what President Trump set out in his goals that more people will be covered and it will be less expensive and it’s going to be great. I don’t think they can recreate an Affordable Care Act that can accomplish as much as this law does. Change is needed but not wholesale changes that will change the law in a radical way.”

Shift to Workers’ Comp

Waxman said he is worried that the country’s uninsured population will rise if, as is being proposed, the individual mandate is eliminated, subsidies are reduced, and deductibles are raised. He said he does not think tax credits will be effective for people who need help. He also predicted that proposed block grants will mean less money for states and thus cutbacks in the number of people on Medicaid.

WCRI CEO John Ruser asked if claims will shift to workers’ compensation and social insurance programs if more people end up being uninsured because of changes to the ACA or other programs.

“I have no doubt about it. I think that’s going to be the result,” said Waxman.

Coburn said he has more faith in giving people the “freedom to buy what they want” and believes states can and will do more with less for those who need Medicaid.

“Freedom beats government control every time,” Coburn said.

Federal Intervention

The two agreed that the workers’ compensation industry probably doesn’t have to worry about the federal government getting involved in its business anytime soon.

“It will be difficult to get to that issue. I don’t see that happening,” said Waxman, suggesting Congress has many other issues on its plate.

He was responding to a question on whether Congress would follow up on a report from the Obama Administration’s Department of Labor that questioned whether states are upholding the original “grand bargain” of workers’ compensation of providing injured workers fair benefits in exchange for them giving up their right to sue their employers for their injuries.

“I don’t think anything will happen on that,” agreed Coburn, adding that he doesn’t think Congress should be telling states what to do on workers’ compensation anyway.

Coburn also told the workers’ compensation specialists to expect to benefit from changes coming in medicine over the next two decades in areas of “personalized precision medicine” and “cures for chronic problems.” He predicted that “at first it’s going to cost a lot but the outcomes especially in terms of workman’s comp” will be great “in ways we can’t imagine.”

Polar Opposites

Waxman said he and Coburn are political opposites but friends who worked on legislation together when they were in office. “You have to try to figure out compromise,” he said.

Coburn acknowledged that the current political climate makes passing anything difficult.

“Henry and I could fix it and put some market forces into it and so will they [Congress] eventually but it’s going to be painful because we’ve created this real polarization in our politics and everybody’s afraid they’re going to get ‘primaried’ on the right or ‘primaried ‘on the left,” he said.

Coburn said the current health care system covers up billions of dollars in waste such that Americans pay twice as much as they should for medical care. He blamed the Food and Drug Administration for some of the high costs.

Coburn stressed that he believes market forces are the solution. He cited an example of Amish citizens who do not have insurance but shop around for the best price on medical care and get a discount because they pay upfront in cash.

“We can fix what’s wrong but we ought to put freedom in the mix and we ought to put personal responsibility in the mix and then let people buy what they want,” he said.

But the political bottom line for Coburn: whatever Congress does may not matter: “Unless you get transparency and market forces, it doesn’t matter what Washington does,” he said.

Waxman dismissed the Amish example, saying that most Americans don’t have the money to pay upfront and instead rely on insurance to pay. In terms of market forces, he said the ACA is an attempt to create competition among insurers in the individual health insurance market

Waxman also said there is no freedom for those who don’t have the money to afford insurance or pay for their own medical care. “Freedom without money to access health care is not freedom,” Waxman said.

Topics Legislation Workers' Compensation Talent Medical Professional Liability