View this article online: https://www.insurancejournal.com/news/west/2012/08/29/261178.htm
Confidence in the state government to reform California’s unwieldy workers’ compensation system is falling as Legislators struggle to get buy-in on a bill to increase benefits for injured workers and address escalating costs.
A recent poll shows nearly six in 10 do not believe the government is capable of reforming the workers’ comp system. That’s up from just over half who took the poll last week who said that government is not capable of creating lasting workers’ comp reform. More than 44 percent of those polled say reform efforts should be scrapped and started anew.
By the close of the poll on Wednesday more than 57 percent answered “No” to a question asking “Is the government capable of creating meaningful, lasting workers’ comp reform?” Roughly 42 percent answered “Yes.”
And who do Californians have to thank for this fine mess? Lawyers. Nearly six in 10 polled think they are the No. 1 problem in the system.
The Insurancejournal.com poll ran from Aug. 21 through Aug. 29 as state Legislators worked to hammer out a bill to reform the ailing system. The poll sought people’s feelings about efforts that stem from months of secretive meetings between labor and a small group of large, self-insured employers that yielded the last-minute 60,000-word-plus bill to implement several workers’ comp reforms.
Friday is the deadline for all bills. Senate Bill 863, authored by state Sen. Kevin DeLeon, D-Los Angeles and coauthored by Sen. Jose Solorio, D-Anaheim, is backed by Gov. Jerry Brown and his Department of Labor and Industrial Relations, which was involved early on in producing a reform proposal. The bill appears to increase benefits for injured workers without spending too much money, but at this point in the process it comes far from the $1.4 billion in savings and $700 million in additional benefits for injured workers originally sought by proponents of reform.
Those who took the poll also seem to be losing faith in Brown’s administration to oversee workers’ comp reforms. A week ago 28 percent said Brown would fare worse in his efforts at reform than Gov. Arnold Schwarzenegger, when he ushered in reforms in 2003 and 2004.
At the close of the poll on Wednesday, more than 35 percent has answered that Brown will do worse than Schwarzenegger. Nearly 40 percent answered he’d do “just as poorly,” while 12 percent said Brown would do better.
There are solid reasons behind the growing doubt. The bill was introduced Friday, and immediately the California Applicants’ Attorneys Association vowed the fight the proposal because it doesn’t do enough for injured workers. A divide is growing among state Democrats, who gave the bill a lukewarm reception following a first hearing on the bill Tuesday, according to sources familiar with the matter.
Getting less that lukewarm reception in the poll were lawyers, who more than 58 percent blame as the No. 1 problem with the workers’ comp system. In fact more poll takers cited “lawyers” at the top problem than they did “fraud,” which nearly 24 percent said was the No. 1 problem. One in 10 polled blamed “workplace safety,” and roughly 7 percent said the system was just “too big to succeed.”
Some polltakers indicated both fraud and lawyers are problems in workers’ comp, but the system’s problems don’t stop there.
“Reduce incentives to abuse system over time,” stated one polltaker. “Reduce administration process. Make (permanent disability) settlements consistent. Get Lawyers out of the system.”
Another’s comments blamed the workers’ comp lien process as well as lawyers.
“Get rid of liens. And, make it less rewarding for applicant attorney involvement.”
Stated another: “Take the lawyers out.”
Three-quarters of polltakers say workers’ comp premiums will rise if no reforms are made, while 20 percent said they will stay the same. At one point early on in the poll more than 90 percent of those polled answered that premiums would rise if no action was taken. Only 3 percent said they would fall.
And if reforms are made? More said premiums will rise than those who said they will stay the same, 35 percent. Early on in the poll 27 percent of respondents said they believed premiums would fall.
Aside from suggestions for reform, a few of those polled posed questions about the process of reform.
“Why not ask whether the bill should be publicly discussed and finetuned, rather than being presented to the public and passed within a week or two?” stated one. “Why were the negotiations secret? Were work comp judges consulted? Necessary reforms — beef up the audit unit, get rid of utilization review, created a special lien unit to handle medical billing issues, overrule the Benson decision.”
Most said reforms ushered in by Gov. Arnold Schwarzenegger in 2003 and 2004 worked, but they blamed rising medical costs for the current situation of the state’s workers’ comp system, while just over one-third of polltakers said those reforms did not work and what’s happening now is proof of their failure. Fifteen percent answered that “they controlled costs, but left injured workers holding the bag, while just over 5 percent answered “They worked great because they controlled costs.”
Some polltakers said politics is getting in the way of reform efforts.
“The current Gov’t in Calif. will not do ANYTHING that will jeopardize, regardless of who it hurts, their relationship with the Unions,” stated one person.
A report issued last week by the California Workers’ Compensation Institute may bear out the reasons for such negativity. The report, compiled from data issued by the Workers’ Compensation Insurance Rating Bureau, shows workers’ comp insurers’ loss and expense payments rose to nearly $12.5 billion in 2011, an increase of over $1 billion from 2010.
However there was some for optimism that efforts to reform workers’ comp are at least taking place in the right venue. Nearly six in 10 said they believe legislation is the best next step for reform.
And despite the growing negativity, some polltakers stated their support for the bill.
“I endorse the broad sweeping reforms of the proposal,” stated one.