Tuesday, June 1, 2010

It’s Time for Washington to Get Competitive - Yes on I-1082


Initiative 1082: The Time is Right for a Competitive Option in Workers’ Compensation

Our Costs Are Too High

■Despite a 52% decrease in on the job injuries since 1990, workers’ compensation taxes have increased more than 53% over the past ten years.
■Even though claims have decreased, the Department of Labor & Industries’ administrative costs increased 82% from 1999 – 2009 (28% in just the last year).
■A recent report from the State Auditor says workers’ comp taxes will need to be increased 33% next year to keep the system solvent.
Our System Doesn’t Work
■In Washington, the average injured worker with a time-loss claim misses 270 days of work—more than twice the national average. Oregon’s average time loss rate is about 70 days.
■WA has the highest pension rate in the nation. Pension rates have increased more than 300% since 1996.
■More than 50% of injured workers are likely to receive a lifetime pension from Washington if they’ve been off work more than two years.
■Between 2007-08 Washington pensioned 3,600 injured workers, while Oregon pensioned just 24. So, for every 1 person who received a pension in Oregon, Washington handed out 150.
■A recent report from the State Auditor says our state’s Accident Fund faces a 74.4% chance of insolvency within two years. Within five years, the chance is 90%.
Washington Is Out of Step With the Rest of the Nation
■Washington is one of only four states with a government monopoly that forbids private competition for industrial insurance coverage.
■While workers’ comp taxes are falling around the country, Washington is one of only a handful of states that increased workers’ comp taxes this year. Oregon has not increased rates in 20 years—and employers there are actually enjoying rate decreases in 2010.
■Washington has the second-highest cost per employee in the nation for workers’ compensation. We provide the third most generous benefit package in the nation. There is no such thing as a high-benefit/low-cost system.

Employers Need More Choices

Five years ago, the West Virginia legislature passed a bill to transition their government-run workers’ compensation system into a competitive market. In the one year since the privatization of WV’s workers’ comp system was fully complete, the result has been:

■The number of claims filed has decreased from 40,000 to 29,000
■Claim protests have fallen 68 percent
■The overall appeals process has been streamlined, resulting in claims disputes being resolved in a shorter period of time
■Claimants have received better claims management by claims adjusters having fewer claims to manage, and
West Virginia’s open market for workers’ comp has also resulted in:

■Overall premiums have dropped over 30%, or more than $150 million
■198 different workers’ compensation insurance companies have filed rates and forms, and 154 of those have active workers’ comp policies in the voluntary market
■More than 90% of all claims are ruled upon within 30 days.
If the goal of workers’ compensation is to assist injured workers in the best way possible while maintaining a competitive business environment, shouldn’t we look at examples where both are apparently taking place?

It’s Time for Washington to Get Competitive.

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