Young: More on Ryancare and Workers' Comp

Thursday, March 23, 2017 | 0

My last post looked at some of the ways the current House proposal for Obamacare repeal/replace (dubbed Ryancare) might affect workers’ comp.

Julius Young

A day in politics can be an eternity. But the vote in the House today looks to be very close. As of Wednesday morning, Politico had an article indicating that current vote count looks as though Ryancare will fail in the House. Even if it passes this week, the package may be DOA in the Senate next week.

Still, the potential ramifications of the AHCA are so vast that it merits great scrutiny. As noted in my recent piece, loss of health care coverage for workers may have real implications for both frequency and severity in workers’ comp claims.

And if workers are nervous about the availability of health care coverage or its pricing, it may be harder for insurers to settle cases with those workers, i.e. harder to close files.

Another unknown is possible implications for new “sharing/gig economy” employers, most of whom do not offer health coverage to what the companies contend are independent contractors. It is not clear whether there will be impacts on the gig economy business model if coverage through Covered California or Medi-Cal is unavailable or too pricey.

What is clear is the significant impact that Ryancare will have on Medi-Cal and Covered California.

In that vein, I’d like to point readers to two interesting studies just released by the UC Berkeley Labor Center.

One, written by Laurel Lucia, Miranda Dietz and Ken Jacobs, is titled “Which California Industries Would Be Most Affected by ACA Repeal and Cuts to Medi-Cal?” They note that under Obamacare some 3.7 million Californians are enrolled in the ACA expansion, and another 1.2 million receive federal subsidies that help make Covered California more affordable. Many of these are people in working families.

They document that many industry sectors have a high rate of Medi-Cal participation or premium support for Covered California enrollment. These are some of the sectors where employers often don’t offer group employer-paid coverage:

“Workers in certain industries in California would be more likely to face loss of insurance under ACA repeal. While 13.9% of California workers ages 18-64 were estimated to be enrolled in the Medi-Cal expansion or Covered California with subsidies in 2015, the enrollment rates for these ACA coverage programs were especially high for restaurant workers (24.4%); retail workers (19.5%); workers in other parts of the service industry like auto repair, hair salons and private households (22.2%); temporary workers, security guards and landscapers (20.7%); and workers in agriculture and related industries (16.9%)."

The UC Labor Center study includes charts showing the numbers of Medi-Cal and Covered California enrollees by industry.

Tuesday, the UC Berkeley Labor Center released another study, titled “Medi-Cal Expansion under AHCA: Severe Coverage and Funding Loss Unless State Backfills Billions in Federal Cuts.”

Here is the heart of the conclusions of the study written by Laurel Lucia, Ken Jacobs and Andrew Bindman:

“Key projections:

• California would have to increase state General Fund spending by nearly $10 billion annually by 2027 in order to keep the ACA Medi-Cal expansion open to new enrollees. This is because the AHCA would cut federal funding for new enrollees in California by 40 percentage points beginning in 2020, and the state would receive this lower federal match for a growing share of enrollees each year.
• If California is not able to make up the lost federal funding and decides to continue eligibility only for individuals enrolled in the expansion as of the end of 2019 (after which federal funding would be reduced dramatically for any new Medi-Cal expansion enrollees), the state would experience severe coverage drops and health care funding losses compared to current law:
  • 3.7 million fewer Californians would be enrolled in Medi-Cal by 2027 because they would lose coverage when they have a break in eligibility.
  • The state’s health care system would lose nearly $25 billion in Medi-Cal funding annually by 2027, including $22 billion in federal funding.
  • The state’s health care system would lose a cumulative total of $130 billion in federal and state Medi-Cal funding between 2020 and 2027.
     
• Certain parts of the state would be especially harmed if California is not able to fully maintain the Medi-Cal expansion due to the federal cuts:
  • For example, in the San Joaquin Valley, where residents have a high rate of enrollment in the Medi-Cal expansion, over 465,000 residents would be projected to lose Medi-Cal coverage in 2027, and the local health care system would lose more than $3 billion in Medi-Cal funding annually by 2027 if the state closes the expansion to new enrollees due to the federal cuts. 
  • Other more rural parts of California would also face serious losses, as would Los Angeles.”

The study includes an appendix that breaks down the numbers by county and also by Congressional and California legislative districts.

Julius Young is a claimants' attorney for the Boxer & Gerson law firm in Oakland. This column was reprinted with his permission from his blog, www.workerscompzone.com.