Posted on 04/16/2004 8:51:18 AM PDT by NormsRevenge
SACRAMENTO (AP) - California lawmakers faced a critical vote Friday to substantially overhaul the workers' compensation system with little more than what they call conjecture and anecdotal evidence that it will save the state's employers billions of dollars. The complex 101-page bill to overhaul the system was crafted largely away from the public eye and approved by a conference committee in the middle of the night.
If legislators approve the plan as expected, they would pass one of the most substantial reforms ever to the 91-year-old system that features some of the nation's highest insurance premiums for employers and some of the lowest benefits for injured workers.
A two-thirds majority vote would make the changes effective almost immediately. Yet many lawmakers fear they will vote with slim knowledge of how much the bill will save, and little power over insurance companies to pass the cost savings, if realized, back to businesses.
An Assembly Republican analysis of the bill prepared Wednesday had no estimates of savings, saying any potential reduced costs for employers are "unknown."
The six-member conference committee approved the bill early Thursday without mentioning precise dollar amounts in savings. Gov. Arnold Schwarzenegger has been no more specific than to say "several billion" dollars, and an administration official said, "It's difficult for us to begin costing it out at this point."
Insurance Commissioner John Garamendi also acknowledged Thursday that he didn't "know what the savings will be."
Insurance industry representatives likewise call promises of major cost savings "premature and speculative." Legislative reforms passed last year promised to trim workers' comp costs by $7 billion yearly, but insurers calculated savings at about $3 billion and didn't substantially lower rates.
Republican leaders wanted a week to read the bill before voting but received about 30 hours instead, as the Legislature had to reach a deal by Friday to keep an alternative reform plan from qualifying for the November ballot.
"There's fairly broad concern about the process, about not having the opportunity to have public or expert review on what types of savings this bill is going to generate or not," said Assemblyman Keith Richman, R-Chatsworth.
While Richman said he thought the bill would pass, whether it means "significant cost savings for employers remains to be seen."
The bill, pushed by Schwarzenegger while simultaneously threatening the Legislature with the ballot initiative, aims to wring billions of dollars in cost savings from a system that saw $17.9 billion in claims last year by setting new limits on medical benefits, standardizing medical practices and making injured workers use doctors approved by employers and their insurance companies. It also prevents the state from telling insurers what they can charge for workers' compensation coverage.
Opponents of the bill, including attorneys and many injured workers, have largely blamed insurance companies for a surge of premium hikes, saying insurers haven't passed costs of last year's reforms to employers. Many Democrats agree, even those who intended to vote for the reform bill.
Just hours after the committee approved the bill, Assembly Democrats introduced a bill to regulate rates charged by insurance companies for workers' compensation coverage.
"We plan to put the issue before the governor's desk," said Assembly Speaker Fabian Nunez, D-Los Angeles. "California businesses need rates to go down and that won't happen unless we make it happen."
Schwarzenegger has steadfastly opposed regulating what insurance companies can charge customers, saying increased competition from an overhauled system will in themselves lower rates.
Workers' compensation costs have soared in recent years in California, from $2.68 per $100 of payroll in 2000 to $6.30 per $100 in 2003.
Overview of the issue: http://www.igs.berkeley.edu/library/htWorkersCompensation.htm
Committee for Workers Compensation Reform and Accountability: http://www.reformworkerscomp.com
The Associated Press
Highlights of proposed workers compensation reform:
- Could eventually cut $5 billion or more from annual costs to employers.
- Prevents state from regulating premium rates charged by insurance companies.
- Makes injured workers first use doctors provided by employer or the employer's insurance company before being allowed to pick their own doctor.
- Requires that employers and employees be considered equal before the law instead of giving benefit of doubt to injured worker.
- Limits most temporary disability payments to 104 weeks.
- Makes doctors evaluating permanent disability assess what percentage of a problem is from a present work-related injury and what was caused by other factors, including past work injuries.
- Makes employer liable only for the percent related to present work-related injury.
- Allows a state reimbursement to small businesses to make necessary workplace changes to return injured employees to work.
- Sets limits on fees for medical services.
- Requires employers to immediately authorize medical treatment for an injured worker who files a claim of occupational injury.
- Requires study of the bill's effect on workers' compensation insurance rates in California.
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Source: California Legislature
Apparently the Republicans have caved in again. No surprise.
Before the Easter break they were adamant that the bill be published for seven days before the vote was taken. They were afraid Schwarzenegger, the Democrats and their own party leaders would double cross them again.
From my perspective anyone who votes the party and not the individual and his beliefs is a major part of the problem in California.
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