Workers compensation medical payments increased among injured workers affected by Medicaid coverage losses, particularly those in construction and manufacturing, according to a study released Tuesday by the Workers Compensation Research Institute.
Waltham, Massachusetts-based WCRI found that average medical payments at 12 months increased 3.1% for lost-time claims following the 2023-2024 Medicaid disenrollment process.
The increase was substantially higher for construction workers, at 10.1%, and manufacturing workers, at 6.1%. Medical payments also increased 4.7% for male workers, 3.5% for workers ages 25 to 55 and 3.7% for workers with fractures.
The increase in medical payments for lost-time claims was driven by a 6.7% rise in hospital payments, while nonhospital payments declined 3.3%.
For all claims, medical payments increased 9.4% among construction workers, 5.9% among manufacturing workers and 4.6% among restaurant and entertainment workers. Payments also increased 4.3% among workers earning less than $30,000 annually.
Researchers analyzed workers compensation data from 31 states to assess the effects of Medicaid disenrollment following the end of pandemic-era continuous coverage requirements.
The study found no measurable changes in workers compensation claim frequency, indemnity benefits, temporary disability duration or attorney representation.
Researchers said the findings suggest that workers losing Medicaid coverage may rely more heavily on workers compensation medical benefits for compensable injuries. Financial pressures on hospitals and other providers following Medicaid coverage losses may also contribute to higher medical payments.
The findings could have implications for workers compensation costs under the federal reconciliation law enacted in 2025, which is projected to substantially reduce Medicaid enrollment in the coming years.
The Congressional Budget Office projects that roughly 11 million people will lose Medicaid coverage by 2034, according to the report.
Researchers cautioned that the study examined claims with only 12 months of maturity and that additional effects could emerge over time. They also noted that the full effects of the 2025 federal law cannot yet be measured.
This article was first published by Business Insurance.
