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"Workers’ Compensation Reform: Employers Save, Insurers Profit, Injured Workers Suffer" is our site of the day
The California Labor Federation has released a 22 page report: "Workers’ Compensation Reform: Employers Save, Insurers Profit, Injured Workers Suffer" that documents the problems from the 2004 compromise legislation passed to "reform" our state's workers' compensation system.
Their conclusion: The bill, signed by Governor Schwarzenegger, was indeed a compromise that included both benefits and take-aways for injured workers. Overall, insurance companies were the big winners in this deal. Not only did companies and their brokers escape any form of regulation, but they also exacted specific benefits in this legislation.
There is an excellent Executive Summary and sections of the report deal with the background of the workers' compensation system, deregulation, indemnity benefits (permanent disability and temporary disability payments), return to work, insurance market reforms, and recommendations to right the system so that savings are shared by workers and employers.
Among the key findings of this report:
• Frequency of workers’ compensation claims has dropped almost continuously over the last 15 years. Workers’ compensation changes that have made it harder for injured workers to access benefits has pushed the frequency of claims even lower.
• Deregulation of the insurance market caused the crisis in workers’ compensation. The repeal of the minimum rate law in 1993 resulted in predatory pricing and the insolvency of 32 insurance companies. Employers skyrocketing costs, beginning in 2000, resulted from insurers’ irresponsible pricing after deregulation.
• Insurers are now making historic profits. In 2005, their loss ratio was 30%. That is, for every dollar collected in premiums, insurance companies are only paying out 30 cents in benefits. Companies have never enjoyed such large profit margins.
• Employers are saving $11-12 billion a year in workers’ compensation costs out of a total system cost of $29 billion.
• Permanently disabled workers face 50% cuts in permanent disability (PD) benefits. Total PD dollars have been slashed by two-thirds.
• Temporarily disabled workers face strict time limits on their benefits. They are being forced to rely on group health insurance and state disability insurance (SDI) – a benefit they pay for themselves.
• Medical treatment is being delayed and denied by insurance companies applying utilization review and strict interpretations of medical treatment guidelines. These reviews of employer chosen doctors are creating more friction and costs for the system and delaying care for workers.
• Incentives to return injured workers back to work are inadequate. The law needs a stick that will encourage employers to keep injured workers on the job.
Read this report and you may understand the history of the last four years that they describe:
Much public attention has recently been focused on California’s multibillion workers’ compensation system. But Governor Schwarzenegger’s reform has failed in its intended goals. Instead, it has resulted in historic insurer profits, generous employer savings, slashed benefits, and denied treatment for workers. The effect has been increased pain and misery for injured workers in California.
Comments
Indeed workers comp system has been arbitrarily mutilated by the governors reform to advance the benefits of the insurance companies interest which they are enjoying today....a record profit that has been distributed for share of gains to corrupt CEO's and greedy Workers Comp insurance company.
Employers too have enjoyed the reduced premiums to its normal rate from the rate gouging perpetrated by the insurance industry as a result of an unjust reform, leaving the loopholes open for corruptions.
All this at the expense of the injured workers. What an outrage! People at the TOP should be ashamed for doing this. It is inhumane to say the least to exploit thevulnerability of the injured workers and take advantage and take away employee's rights.
Workers comp system was designed and intended to work as a NO-FAULT system that protects the employers from costly litigation and to insure employees from financial burdens as a result of a job related injury and to prevent the transfer of these costs associated to public funds such as social security and state disability funded insurance and litigation and court cost to remedy such claims.
Who benefitted? Insurance companies, employers, crooks and corrupt politicians. The losses and harm are passed on to the injured. Where is the public outrage? Who is accountable? Governor and Assembly members, we want answers.
Posted by: anon at April 2, 2007 04:30 PM
WHO BENEFITTED,WHO BENEFITTED???!!!!!
LETS TRY THE STATE OF CALIFORNIA THAT'S WHO.......
AFTER ALL, FOR THOSE WHO DO NOT KNOW, SCIF aka STATE COMP INSURANCE FUND IS RUN BY THE STATE OF CALIFORNIA. IF YOU WANT A JOB WITH THESE *%#@'s ALL YOU HAVE TO DO IS GO TO THE STATE PERSONEL BOARD WEB SITE, THEY PAY WELL,TOO.
SO, LET'S SEE NOW YOU CAN'T AFFORD W/C INSURANCE FOR YOUR EMPLOYEES??
WELL,JUST GO TO SCIF, THE CHEAPEST INSURER AROUND. WHAT'S THAT HOW COME SCIF HAS SO MUCH MONEY TO INVEST?? THEY STEAL BENEFITS FROM INJURED WORKERS.
ONE QUESTION I HAVE ...... IF SCIF IS MAKING SO MUCH MONEY WHY AREN'T THEY SHARING WITH THE STATE OF CALIFORNIA SO THEY CAN PAY THIER INJURED STATE WORKERS MORE MONEY OR HEY HERE'S A NOVEL IDEA WHY DON'T WE LET THEM COLLECT DISABILITY BENEFITS IF THEY'RE INJURED.....
SIGNED...
THE SPOUSE OF AN INJURED STATE WORKER WHO'S GETTING THROUGHLY SCREWED BY SCIF...
BUT DON'T CALL ME ANGRY ; )
Posted by: silky at April 2, 2007 08:08 PM
JUST ONE MORE COMMENT AND THAT'S ENOUGH SPLEEN VENTING FOR ME..... : )
IT REALLY BOTHERS ME THAT I HAVE TO LOOK AT THIS WEB PAGES' GOOGLE ADS ADVERTISING LOW COST SCIF INSURANCE. IT'S REALLY A SLAP IN THE FACE FOR THOSE OF US THAT CAME HERE TO FRANK RUSSO'S PAGES LOOKING FOR SOME JUSTICE AGAINST THE W/C SYSTEM.
BUT HEY, CALL ME DIFFERENT THAT WAY.
Posted by: silky at April 2, 2007 08:16 PM
Silky: I don't disagree with you, and I may do something different with Google ads that reflect words in articles and so sometimes advertise just the opposite of articles. I will be working on this when the site is revised.
Posted by: Frank D. Russo at April 2, 2007 08:22 PM
I dont know too much about the Workman's Comp program. I am an injured worker. I just had lower back surgery last month. My back still hurts like hell all of the time. I have a wife and three kids. I fear for the worse that we are all going to get screwed by workman's comp. I have hired an attorney, but I have not heard too much from them yet. I have my final doctors appointment in 3 weeks to see just how much I am disabled, and if I can return to work. I hope that I can get retrained, and a big enough settlement to provide for family. But, I fear for the worst. I have a feeling that the governator is really going to stick it to me. Got my fingers crossed. If there is anyone out there with any info, I would be most appreciative.
Posted by: Joey at October 16, 2007 08:21 PM
What California thinks is by not caring for the injured worker while fattening the pockets of employers and insurance companies that businesses will prosper. Already businesses are going out to other countries.
Mr. Governor when will you open your eyes to your negative attitude?
Can you show how businesses are sucessfully run with only capital and no workers?
There are many fradulent claims but also there are faruds in the insurance companies and the the political world so why segregate the injured worker.
Posted by: Ro7314 at May 27, 2008 05:47 PM
What California thinks is by not caring for the injured worker while fattening the pockets of employers and insurance companies that businesses will prosper. Already businesses are going out to other countries.
Mr. Governor when will you open your eyes to your negative attitude?
Can you show how businesses are sucessfully run with only capital and no workers?
There are many fradulent claims but also there are faruds in the insurance companies and the the political world so why segregate the injured worker.
Posted by: Ro7314 at May 27, 2008 05:47 PM
Already businesses are going out to other countries.
Mr. Governor when will you open your eyes to your one-sided attitude of saving money.
Can you show how businesses are sucessfully run with only capital and no workers?
There are many fradulent claims but also there are frauds in the insurance companies and the the political world so why segregate only the injured worker.
Posted by: Ro7314 at May 27, 2008 05:49 PM
Already businesses are going out to other countries.
Mr. Governor when will you open your eyes to your one-sided attitude of saving money.
Can you show how businesses are sucessfully run with only capital and no workers?
There are many fradulent claims but also there are frauds in the insurance companies and the the political world so why segregate only the injured worker.
Posted by: Ro7314 at May 27, 2008 05:49 PM
Already businesses are going out to other countries.
Mr. Governor when will you open your eyes to your one-sided attitude of saving money.
Can you show how businesses are sucessfully run with only capital and no workers?
There are many fradulent claims but also there are frauds in the insurance companies and the the political world so why segregate only the injured worker.
Posted by: Ro7314 at May 27, 2008 05:50 PM
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