Medicaid Losses Raise Workers Comp Medical Costs

A Workers Compensation Research Institute study links medical payment increases for injured workers to Medicaid coverage losses.

Updated on Nov. 4, 2026 in Employment

Medicaid Losses Raise Workers Comp Medical Costs

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Should employers bear more of workers' medical costs when public health coverage is lost?

The Workers Compensation Research Institute reported that average medical payments at 12 months rose 3.1% for lost-time claims after Medicaid disenrollment in 2023 and 2024. The study analyzed workers compensation data from 31 states.

Why it matters

Researchers said workers who lose Medicaid coverage may rely more heavily on workers compensation medical benefits for compensable injuries. The Congressional Budget Office projects roughly 11 million people will lose Medicaid coverage by 2034, suggesting the effect could expand over time.

The Workers Compensation Research Institute analyzed claims from 31 states, finding a 3.1% rise in average 12-month medical payments for lost-time claims and a 9.4% increase across all construction claims. The study examined only claims with 12 months of maturity, so longer-term effects remain unknown.

The players

Workers Compensation Research Institute

The Waltham, Massachusetts-based research organization studies workers compensation systems and outcomes across U.S. states.

Congressional Budget Office

The nonpartisan federal agency provides budget and economic analysis to Congress, including Medicaid enrollment projections.

The details

The study found no measurable changes in workers compensation claim frequency, indemnity benefits, temporary disability duration or attorney representation. Researchers also cited financial pressures on hospitals and other providers following Medicaid coverage losses as a possible contributing factor.

2023-2024: Medicaid disenrollment followed the end of pandemic-era continuous coverage requirements.
2025: Federal reconciliation law enacted, projected to substantially reduce Medicaid enrollment.
2026-11-04
Workers Compensation Research Institute released the study.
2034: Congressional Budget Office projects roughly 11 million people will lose Medicaid coverage.

Economic Ripple Effects

The 2025 federal reconciliation law is projected to substantially reduce Medicaid enrollment, and this study documents one early cost shift from those coverage losses into workers compensation systems. The pattern suggests that changes to public health coverage can move costs onto employer-funded insurance programs.

Workers injured on the job may face different medical bill outcomes as Medicaid coverage changes reshape how care is paid for. Employers and workers should watch how workers compensation premiums and claim costs respond as projected coverage losses take effect.

The takeaway

Changes to public health coverage can shift medical costs into workers compensation systems, affecting injured workers and employers alike. Tracking claim payments over time will show whether these early increases persist as Medicaid enrollment declines.