The Workers’ Compensation Research Institute (WCRI) published a new study that examines how workers’ comp claim frequency and medical spending may be impacted by reductions in Medicaid.

The Congressional Budget Office projected that H.R. 1 will result in approximately 11 million people losing Medicaid coverage by 2034, prompting healthcare stakeholders across the board to consider what ripple effects that will cause – including workers’ comp.

The study examines how the 2023–2024 Medicaid unwinding – when states resumed regular eligibility reviews and disenrollments following the expiration of pandemic-era rules – affected workers’ comp systems.

WCRI researchers analyzed workers’ compensation claims data from national and regional insurers, residual market carriers, state funds, and self-insured employers. The analysis covers injuries occurring between October 2017 and September 2024 across 31 states, representing more than 80% of workers’ comp benefits paid in the United States.

During the unwinding, medical payments increased for lost-time claims, but there was no change in claim frequency, indemnity benefits, temporary disability duration, or attorney representation. For lost-time claims, the average medical payment at 12 months increased by 3.1% This was larger for construction and manufacturing workers at 10.1% and 6.1% respectively. Male workers also saw an increase to 4.7%.

Increases in average medical payment per lost-time claims were driven by an increase in hospital payments of 6.7%, and an increase in nonhospital payments of 3.3%. For all claims there was in increase in medical payments among construction workers at 9.4%, manufacturing workers at 5.9%, restaurants and entertainment workers at 4.6%, low-wage workers at 4.3%, and male workers at 3.8%.

The share of claims with prescription payments increased, while the share of claims with some nonhospital services decreased.