Medical Care Covered by the Workers’ Compensation Insurance Program
Workers’ Compensation (WC) insurance is the state-mandated, employer-provided insurance that covers medical costs for work-related injuries and illnesses—these medical costs exceed $30 billion per year—approximately one percent of US healthcare expenditures. (For workers whose injury or illness is severe enough, WC also pays cash benefits to replace lost wages.) The three papers in this session examine different aspects of the medical care covered by WC. The first paper examines whether a move to a closed formulary, where drugs on the non-preferred list require preauthorization before being prescribed, impacts pharmacy costs or medical expenditures for other types of care. The other two papers address different issues related to the take-up of WC. The second paper examines potential spillover effects from the Massachusetts health care reform and finds that Emergency Department (ED) discharges fall modestly following the reform’s implementation. The findings from this paper also address a concern in the prior literature: whether WC was covering medical costs for uninsured workers’ non-work related injuries. The third paper examines why Hispanic workers are less likely to take up WC benefits than non-Hispanic workers, which is especially concerning because Hispanic workers are more likely to be employed in dangerous industries and occupations. Together, the papers in this session address important issues facing WC medical benefits. Further, lessons from these papers inform health economists and policymakers more generally regarding the impact of a closed formulary, increased demand for care outside of the ED following health insurance expansions, and low take-up of health insurance among Hispanics.