Workers' Compensation in the United States: Cost Shifting and Inequities in a Dysfunctional System

Abstract

Workers' Compensation is a far more significant expense to the U.S. economy than is commonly recognized. The total annual cost of the health care and disability benefits in the United States is at least $300 billion. The health care costs shifted by employers to Medicare/Medicaid and the disability costs shifted to the Social Security system far exceed the total costs of all the state Workers' Compensation programs. Most of the responsibility for compensating disabled workers now resides in the federal government, not in the state system. Federal funding of Workers' Compensation is at least four times that of state programs. State and federal Workers' Compensation programs are a costly and inefficient segment of health care that should be included in any consideration of health care reform.