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Home / Washington Business - January/February 2005 / Points of View: Workers' Comp Tied to Health Care |
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Points of View: Workers' Comp Tied to Health Care |
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Written On: January/February 2005 |
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Written By: By Sen. Karen Keiser |
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Sen. Karen Keiser (D-Des Moines) chairs the Senate’s Labor, Commerce & Research and Development Committee. She has served in the Legislature since 1996, first as a state representative, then as a senator starting in 2001. She is also the communications director for the Washington State Labor Council.
A couple years ago, a constituent contacted me about a crisis. She was recovering from a serious workplace accident. As her bones and muscles healed, she discovered she had breast cancer. But her employer-provided health care had been suspended, she didn’t qualify for the low-income restrictions of public programs, and she couldn’t afford to purchase an individual policy. She was scared.
Workers’ comp only covers the medical needs created by the injury; it doesn’t include dependents or spouses or non-injury medical needs. This case reflects the larger problem of health care in our country, and reform of health care and workers’ compensation are again before the Legislature.
Workers’ compensation is the original tort reform. In exchange for legal immunity for employers, business and labor agreed on a system that promised “sure and certain relief” to injured workers. This “no fault” approach has worked fairly well over the last century, but like all systems, well-founded reforms improve performance.
For example, the retrospective rating program was created as a way to allow smaller employers to group together and, through claims management and improved safety programs, enjoy a “retro refund” on their premiums. AWB’s CompWise Program is a good example of how the benefits of “retro” should be managed. AWB’s retro members enjoy sizable refunds for fair, up-front fees.
Other retro programs don’t meet that standard. Reducing workplace injuries should be the goal of any retro program. One program in the high-injury field of home builders has ballooned into the biggest program in the state without any real reduction in injuries. This is a perversion of the retro program’s purpose and must be reformed or the entire program will be threatened.
Another productive reform would be an effective ombudsman to reduce claim disputes. When workers are in pain and employers fret about costs, misunderstandings happen. An ombudsman can sort through the conflict without need for expensive litigation. The workers’ comp performance audit also recommended such an ombudsman.
Washington’s workers’ comp system is unique. We are the only state where workers pay part of the premium. Workers contribute a sizable sum, 27 percent of the premium of state-fund employers. This unique feature helps explain why our state’s workers’ comp system has the best of both worlds: High benefits and low premiums.
The 1998 JLARC performance audit reached the same conclusion, that Washington’s unique system created an envious situation, a stable system with low costs and high benefits. It’s a myth that we have higher costs than many other states. In fact, last year Reliant, a California trucking company, moved to Spokane to save a $0.5 million a year in workers’ comp premiums.
Premium rates for workers’ comp remained flat for 10 years, followed by two years of big increases. The premium increase of less than 4 percent for 2005 reveals that the spike following the stock market bubble has indeed passed.
Barring further Wall Street disasters, the system should continue to see only moderate increases, despite huge medical-cost pressures. The rising cost for medical care far outpaces the increases in workers’ comp premiums.
The system needs further attention. I understand the employer anxiety that recent court decisions have created. Frankly, the court’s Cockle decision, although logical in finding that fringe benefits are part of the compensation package, doesn’t achieve the real goal — keeping injured workers covered by health insurance. My constituent who struggles with cancer while recovering from her on-the-job accident keeps me working on that problem. I look forward to working on it with you.
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