AASCIF: State Funds Prepared to Adapt to Health Care Changes

State workers' compensation funds are well-poised to adapt to any changes in health care and health insurance under the new health care reform law because of their long-standing relationship with governmental involvement on the state level, the president of the American Association of State Compensation Insurance Funds said.

Workers' compensation is a highly regulated line of business and that is even more true for state-formed funds, said Laurence "Lanny" Hubbard. Hubbard, also president and chief executive officer of the Montana State Fund, was attending the group's National Issues Conference.

"Those of us single-line, single-state workers' compensation carriers are used to substantial political involvement in the benefits that we provide," he said. "To that extent, we have the advantage of adapting to some of those reforms as they translate into state-level action."

Workers' compensation issues are virtually unmentioned in the federal Patient Protection and Affordable Care act, but workers' comp insurers should not expect to be immune from its impact, Keith Bateman, vice president of workers' comp for the Property Casualty Insurers Association of America, told conference attendees. Calling the law "an economic stimulus package for those of us who lobby and litigate," Bateman said, "The Congress and the public are in the mood to micromanage private insurers."

Health care reform might reduce the cost shift to workers' compensation from nonoccupational conditions suffered by those who are currently without health insurance, but this effect is unlikely to be significant, said Greg Krohm, executive director of the International Association of Industrial Accident Boards and Commissions.

Hubbard said there is other room for optimism as well. "We could get a collateral benefit from workers being healthier, from being better fit and that means less injury," he said.

There is another benefit to being more of an observer than a target as state and federal officials determine regulations and rules for implementing the legislation, said Thomas Phelan, president and CEO of Maryland's Injured Workers Insurance Fund. "Now is a good time to kind of be on the sidelines and watch what the ultimate outcome of all of this reform is going to ultimately mean," he said.

A provision of the health care act amended the 30-year-old Black Lung Benefits Act to open up the possibility of new claims from the past, resulting in millions in litigation costs. The amendment presumably makes it easier for coal miners and their families to collect benefits if they acquire black lung disease, a common affliction among miners, so long as they have been employed at a mine for at least 15 years. This change is retroactive to 2005 (BestWire, April 19, 2010).