Bill to Increase Workers’ Comp Benefits Doesn’t Solve System’s Problems, AIA Says

September 7, 2001

A bill approved by the California State Assembly does not go far enough to balance benefit increases with cost-saving reforms to California’s workers’ compensation system, according to the American Insurance Association (AIA).

“It is unfortunate that after three years debating this issue there is still a lack of recognition that the waste and abuse in this system are as grave a threat to the welfare of injured workers as are low benefits,” said Mark Webb, AIA vice president, western region.

The bill, SB 71, sponsored by Senator John Burton D-San Francisco, contains a package of benefit increases and minor reforms to California’s workers’ comp system. Insurers and the employer community continue to oppose the measure because it fails to solve the major problems that are driving up costs such as rising medical expenses, over-utilization of medical procedures and a lack of fairness in the disability evaluation process

“Everyone agrees that California workers deserve an increase in benefits,” said Webb. “Governor Davis has vetoed two bills in a row because he was concerned about how a new burden on businesses will impact California’s economy. California’s economy has only worsened since then. If both sides would like to see a bill signed into law, then we should work together to find a balanced solution.”

“Governor Davis has proposed a series of reforms that are intended to address many of the cost drivers in the system,” said Webb. “Now is the time for all sides to come together and look at the Governor’s proposals before we let another year go by without a benefit increase. ”

The California State Assembly voted along party lines 47 to 26 to approve SB 71. The measure will now move over to await a full vote by the State Senate.

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