What impacts workers' comp insurers? Here is my take on today's trends.
Current economic and medical trends could have a huge impact on workers' compensation insurance in the years to come. Some of these shifts may create serious problems for the industry. At the same time, other developments offer adaptable insurers the chance to improve their services and boost efficiency.
Many industries have recently made tremendous progress in using internet and mobile technology. Medical insurance and Veterans Affairs beneficiaries can now view health records online. They also have the ability to discuss medical issues with physicians via email. Workers' compensation insurers may cut costs and enhance customer satisfaction by adopting similar technology. For example, specialized mobile apps could expedite claims.
The health care industry has undergone numerous changes in the past decade. More and more Americans rely on Medicaid or Medicare. Both programs generally provide less funding for treatment than workers' compensation insurance. Unfortunately, this gives doctors and patients an incentive to make WC claims whenever possible.
Another problem is that rising health insurance deductibles may pressure employees to claim workers' compensation benefits. Certain estimates suggest that upcoming reforms will increase the number of uninsured Americans, but the actual consequences remain to be seen. On the bright side, the Affordable Care Act has brought about valuable research. Physicians are using nationwide data to identify the most effective treatments for various occupational injuries.
Even as people spend increasing amounts of WC funds on medical services, wages have continued to grow rather slowly since 2008. Employees can no longer count on significant raises. This affects workers' compensation insurers because they use staff wages to determine rates. The problem is that steady premiums become unsustainable when medical costs rise.
Additional states continue to legalize marijuana. For instance, Maine began to allow its use in early 2017. This could eventually result in workers' compensation claims that request funds for medical marijuana. Insurers will need to determine if this is truly an effective treatment. They must also look at the potential for cannabis to cause workplace injuries.
Rising numbers of Americans have developed a dependence on opioid drugs. Many people experience these addictions after suffering injuries. Some addicts utilize insurance payments to fund long-term opioid use. They become unable to work for lengthy periods of time. The industry needs to respond by finding ways to prevent and discourage misuse.
More and more people perform their jobs in home offices or carry out other off-site tasks. Although this often cuts employers' costs, it's harder for supervisors to maintain safe work environments. Insurance carriers must develop a fair, efficient strategy to serve companies with numerous telecommuters.
Federal regulations have greatly reduced workplace injuries in recent decades. The government has also begun to criminally prosecute bosses who create hazardous working conditions that trigger fatalities. Safer equipment and vehicles help to prevent injuries and claims as well. However, the current federal administration has called for fewer regulations. This could eventually result in more dangerous conditions.
Recent events in the United Kingdom and France show that terrorism remains a serious threat. Although many types of insurance companies exclude terrorist attacks from their coverage, federal law requires workers' compensation insurers to cover every job-related injury. This may become a major financial concern if Congress allows the government's Terrorism Risk Insurance Program to expire in 2021.
Increasing productivity and lower energy costs have made America a more attractive place to manufacture goods. The government may soon introduce tax reforms that promote domestic manufacturing. Insurers could receive more WC claims as inexperienced workers enter new factories. On the other hand, increased automation and greater training might reduce injuries in the years ahead.
Fewer young people are joining the workforce than they did in the past. Although some insurance professionals worry about aging staff members, these workers don't appear to be making more claims than younger individuals. The problem is that middle-aged employees have begun to suffer increasingly severe injuries. They frequently develop long-term disabilities and incur sizable expenses.
To remain successful, workers' compensation insurers must find ways to adapt to evolving technology, demographics and workplace hazards. They can benefit from making the most of positive trends in the economy and health care. At the same time, it's crucial to prepare for changes that could introduce new risks.