Researchers Suggest Increased Indemnity Benefits Lead to More Time Off, Higher Medical Costs

Raising indemnity amounts can prolong the duration of claims and increase payments for medical services, according to a new study by two economics professors. “We find that increasing the generosity of wage replacement benefits does not impact the number of claims but has a large impact on claimant behavior, leading to longer income benefit durations and increased medical spending,” reads the preliminary study by Marika Cabral, assistant professor of economics at the University of Texas, and Marcus Dillender, now a professor at the University of Illinois, Chicago. The study f...