In the last several years, our nation has been in the throes of the worst recession since the Great Depression. While the Great Recession brought plenty of challenges for the workers' compensation industry—including increased potential for fraud—during this time our country also underwent significant comprehensive health reform. These events have created unique challenges and significant uncertainty for the workers' compensation industry.

In March 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act and the companion Health Care Education Reconciliation Act of 2010 (hereinafter referred to together as “ObamaCare”). Although the full effects of ObamaCare on the workers' compensation industry remain to be seen, initially experts have seen it as a double-edged sword for medical costs.

Under ObamaCare, hospitals may have less of a need to cost shift to workers' compensation since more people will be covered by insurance (by some estimates an additional 10 percent of the U.S. population or more than 30 million people). However, other providers may cost shift more to workers' compensation due to cuts in Medicare reimbursement. Finally, as ObamaCare leads to new regulations in the health insurance industry, ultimately this may have a trickle down effect to the workers' compensation industry as jurisdictions adopt similar regulations.