The potential effects of the ACA on disability insurance and workers' comp programs

Marcus D image

The Affordable Care Act (ACA or Obamacare) has led to many changes in the nation’s health care landscape. Included are impacts on two major social insurance programs that also contain medical components—federal disability insurance and workers’ compensation insurance.

In a recently published chapter titled “The Potential Effects of the Affordable Care Act on Disability Insurance and Workers’ Compensation,” Institute economist Marcus Dillender explains that, while the ACA does not specifically address these programs, it likely has important spillover effects on them.

According to Dillender, “First, the ACA could affect the likelihood that people apply for these programs since health insurance may substitute for the types of services they provide. This would affect the number and types of people receiving benefits as well as the overall costs. Second, the ACA has several features that will change the types of insurance plans people have, such as eliminating copays for preventive care and taxing expensive, high-benefit plans. These features could result in healthier people or more cost shifting. Finally, the ACA implements many changes that alter medical resources. Since both disability and workers’ compensation tap into the same systems as health insurance, changes that affect the medical system more generally will affect these programs as well.”

Dillender also cites evidence that people with health insurance generally are in better health and that preventive measures included in the ACA should lead to better health and a lower likelihood that people will become disabled or suffer a work-related injury. Electronic medical records, also facilitated under the ACA, will also likely lead to reduced costs for medical care provided by disability insurance and workers’ compensation.

Read “The Potential Effects of the Affordable Care Act on Disability Insurance and Workers’ Compensation” by Marcus Dillender.

(This chapter is included in The Economics of Health, Donald J. Meyer, editor.)