Texas Physicians Group: New Comp Rules Benefit Workers

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The article asserts that about 50 cents of a Texas workers compensation premium dollar is spent on medical benefits. This translates to a 50% medical loss ratio for insurers.

Doctor Smith wonders why insurers are allowed to keep 50 cents of every premium dollar.

But I’m not sure the insurers are keeping that much.

There are indemnity benefits to consider as well. In aggregate, I’ve seen these total 2/3 of the medical benefit. So, against 50 cents of medical benefit, there’s an addtional 33 cents of indemnity. Combined, this suggests Texas insures keep 12 cents of every workers compensation premium dollar. This 12 cents covers overhead and profit.

Whether 12 cents is too much is certainly a question for the regulators to decide, but, unless I’m missing something, the insurers are not pocketing 50 cents on the dollar.

It seems the Texas Medical Association may not understand the workers compensation benefit system.