Association for Public Policy Analysis & Management

Understanding whether newly-insured individuals are any more or less likely to claim Workers’ Compensation (WC) benefits is especially important in light of the insurance coverage expansions from the Affordable Care Act (ACA) which are expected to expand insurance coverage to as many as 26 million nonelderly persons per year. However, existing evidence is mixed (see, e.g., Smith, 1990; Card and McCall, 1996; Lakdawalla et al., 2005; Campolieti and Hyatt, 2006; Heaton, 2012; Dillender, 2014). In this paper, we examine whether Massachusetts’ 2006 health care reform (and the associated increase in insurance coverage) reduced the likelihood an ER discharge was billed to WC.

Our analysis proceeds in two steps. First, because the reform lowered the cost of a physician’s visit, relative to an ER visit, for previously uninsured individuals, we analyze the effect of the reform on the site of medical care.  A decrease in ER visits per-capita would be consistent with newly-insured individuals seeking care in other settings (e.g., doctors’ offices, urgent care facilities). A preliminary analysis using data from the Healthcare Cost and Utilization Project (HCUP) for Massachusetts and Vermont between 2006 and 2008 shows that per-capita ER discharges decline significantly in Massachusetts, relative to Vermont, following the reform. This is consistent with access to insurance causing a shift in location of medical care from the emergency department to physician’s offices or urgent care centers.

Next, we examine whether the reform impacted an individual’s incentive to list WC as the primary payer, conditional on being treated in the ER.  In our preliminary analysis, we find little to no evidence that the reform impacted the likelihood of a discharge being billed to WC. On the other hand, we do document other expected effects of the reform, including a decline in the likelihood of a discharge being uninsured (i.e., of the patient being the first payer) and an increase in the likelihood that a discharge is billed to Medicaid. We will extend our preliminary analysis to include two additional years of data for Massachusetts and Vermont, and add four additional comparison states (Maryland, New Jersey, California, and Florida).

The interaction of public health insurance with other social insurance programs, like Workers’ Compensation insurance (WC), is an important and timely policy question, yet these programs are often studied in isolation. Indeed, the literature has only recently begun to assess the impacts of expansions in health insurance coverage on participation in WC, or on program costs (Dillender, 2014; Heaton, 2012). Our research aims to help fill this gap in the research and contribute to evidence-based policymaking, by providing a comprehensive examination of the impacts of Massachusetts’ 2006 health care reform on the share of ER discharges that are billed to WC. More broadly, our results can help shed light on the expected impacts of the ACA on WC claims and program costs.