Report calls nation’s workers’ comp programs ‘colossal failure’

October 9, 2006

A new report released by consumer rights group Center for Justice & Democracy (CJ&D), is criticizing workers’ compensation programs throughout the country, saying they have been devastating for injured workers, leaving workers to contend with an adversarial bureaucracy and inadequate benefits that render many destitute.

The report, “Workers’ Compensation — A Cautionary Tale,” called the workers’ compensation program a “colossal failure.” It also noted, “[t]he real winners are insurance companies, which continue to boast record profits as workers’ benefits are declining.”

“The workers’ compensation system has been rife with problems almost since its inception,” the report stated. “Employers who pay into it, employees who rely on it, analysts who look at it and scholars who study it all have a long list of complaints about how it does not work. It is a heavily bureaucratic, adversarial system that shortchanges injured workers, even while employers struggle now and then with rapidly rising workers’ compensation insurance rates. And to the extent that rate reductions have taken place, they inevitably have come at the expense of the injured, where lawmakers have slashed benefits and pushed many of the injured entirely out of the system.”

According to attorney and policy analyst Amy Widman, also the report’s author, “Workers’ compensation is an unfortunate example of how a seemingly fair program can be manipulated by political forces into a nightmare for those it was originally meant to help.”

The report analyzed what it calls the progressive deterioration of the workers’ comp system since its inception in the early part of the last century, highlighting what it says are disturbing trends in several states. Widman said the report’s release comes shortly after the 5th Anniversary of Sept. 11, where the plight of many cleanup workers who are being denied workers’ comp benefits for their illness and injuries, illustrates many of the problems workers face in getting claims paid.

The report branded workers’ comp a “cautionary tale” about the pitfalls of administrative programs that take away people’s right to trial by jury, such as proposed “health courts” for medical malpractice victims.

The CJ&D Report warned against that idea stating, “Once political forces take over a statutory system, and they always do, it is merely a matter of time before a pro-victim proposal for no-fault compensation is turned into a fault-based, bureaucratic nightmare for the injured person.”

In the meantime, workers’ comp rate reductions are not helping. According to the report, “State legislatures are chipping away at workers’ compensation systems at an alarming rate in direct response to the requests of insurance carriers and businesses. In many states, the process workers must go through to make claims and receive compensation has become longer, less efficient, and ultimately less successful in terms of its original goals.”

A copy of the national CJ&D Report and several state-specific reports can be found at http://centerjd.org.

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