I’m always a little frustrated that we never hear the rest of the story after an initiative has failed. The post-I-1082 story is very interesting.
It’s common, and certainly every citizen’s right, to bash government failures. Far rarer, however, is praise for government successes.
As the Gregoire administration winds down, workers’ compensation is such a success.
Just two years ago, citizens were confronted with an initiative – I-1082 – to allow private insurers to operate within workers’ compensation. To sell this boondoggle for Liberty Mutual and other private insurers, proponents claimed workers’ compensation rates would otherwise soar into perpetuity.
Voters in every county rejected this argument.
The Department of Labor & Industries has announced rates will not go up in 2013. This is the second straight year that’s been true. Even after losing, I-1082’s proponents hadn’t abandoned their scare tactics. They predicted rates would go up by 33 percent in 2011. They went up 12 percent. And that was the last increase.
In 2013, many business classes’ rates will actually go down – by 3 percent for nursing homes, for example. This second straight year of declining workers’ compensation costs will represent a savings to nursing homes of more than $1.1 million at a time when Medicare and Medicaid funding is in constant peril.
Ironically, under I-1082, which would have removed the worker incentive to stay healthy through paying part of workers’ compensation costs (workers pay 24 percent of the rate), rates would have skyrocketed for these cash-strapped businesses. They would have paid $507, instead of $230, more per worker in 2011 – and that larger amount would still be built into their base rate today.
In 2011, statutory changes were made to the workers’ compensation system.
What’s clear is that the best reforms are those business and labor agreed upon. One provided incentives for employers to keep injured workers on the job in light duty, thus reducing time-loss. In such cases, employers can be reimbursed for 50 percent of the base wages.
Another success is moving forward on a statewide network for providers who treat injured workers. Providers are being enrolled, and the network launches in January. By December 2013, at least half of injured workers (today it’s roughly one-third) will also have expanded access to the state’s Centers of Occupational Health Education. The state has already held medical cost growth below 4 percent over the past five quarters; these additional reforms should save $218 million over four years.
Savings from the most controversial reform – so-called “structured settlements” to avoid lifetime pensions – are more speculative. This regrettable change puts injured workers in a situation where they may unwisely cash in claims, without benefit of counsel and under financial duress, for perhaps 80 percent of their value. That would leave them (or, more likely, Medicaid or hospital emergency rooms) on the hook for unmet medical needs.
Finally, Washington employers themselves are to be commended. Claim frequency has gone down by 6.2 percent. Rate decreases for businesses are due in no small part to proactive management of both risk, and claims, by employers and by third-party administrators of group retrospective rating programs that business associations offer as a means of incentivizing safety.
The Washington Health Care Association, for example, rebates up to $2,500 for nursing homes in its workers’ compensation program that purchase safety equipment such as slip-resistant caregiver shoes or floor mats.
This existing private sector success makes it clear that any further campaign talk of injecting the for-profit motives of private insurers into our workers’ compensation system is foolish.