Injured cops and firefighters, their advocates and union leaders today blasted a reported proposal on cutting benefits to injured workers. The injured workers, their advocates and consumer advocates said the proposal would harm those who could least afford it, the injured workers whom the system is supposed to protect. They pointed in particular to three provisions of the reported proposal: forcing injured workers to be treated only by a company-selected doctor, absence of any real regulation requiring insurers to reduce rates or pass on savings to employers, and taking away compensation from many injured workers with permanent partial disabilities. “Many injured workers with severe permanent injuries will receive little or no compensation under the reported proposal,” said Afrack Vargas, Legislative Advocate for the California State Firefighters’ Association. “This proposal will make it virtually impossible for most injured workers to ever select their own doctor. Labor fought for many years to obtain this right for its members. This proposal turns back the clock to the bad old days when injured workers were given shoddy care by medical providers controlled by the company.”
“The proposal hurts certain workers more than others. Older workers take the hardest hit, along with minimum wage workers.” Said Art Azevedo, president of the California Applicants Attorneys Association (CAAA), whose members represent injured workers. “The proposal robs injured workers while letting insurance companies off the hook for the crisis they created. The proposal is one-sided, all takeaways from injured workers and benefits for big insurance companies. I cannot believe that any Democrat would support such a proposal, and every Republican with a sense of fairness should reject this proposal.”
The drowning pool: Injured workers Lose Choice of Doctor
Current law allows injured workers to select their own treating physician 30 days after the injury is reported to the employer (the employer controls selection of the treating physician for the first 30 days).
The reported proposal would require that injured workers get treatment only from a closed pool of doctors selected by an insurance company. This proposal would not allow the injured worker to get outside of this company-doctor pool until they had seen at least three insurance company doctors! “Such a scheme would be a disaster for injured workers. The purpose of such a proposal is to silence the workers: their description of their pain and limitations will no longer be considered,” said Azevedo. “They will be relegated to seeing company doctors who rely for their business on keeping the insurance companies happy. If those doctors fail to keep the insurance companies happy, they will be eliminated from the insurance companies’ pool of physicians.”
There is no free choice of doctor for the injured worker.
Free choice from a pool of company doctors is no choice at all
Employer can kick any good doctor out of the pool
Permanent Partial Disability changes ignore lifetime disability, penalize those who return to work, ignore pain
Current law provides permanent disability benefits for workers who have a lifetime disability as a consequence of a work injury or illness. The amount of compensation is calculated according to a schedule that bases a permanent disability rating on the physical elements of the injury or disfigurement, the age and occupation of the worker, and the “diminished ability of such injured employee to compete in an open labor market.”
The proposed proposal ignores the lifetime consequences experienced by workers, severely disadvantages lower wage workers, and penalizes workers who return to work despite their disability. Mandating use of the AMA Guides will harm workers because the Guides measure impairment and not disability. This will eliminate benefits for many workers because medical science is not always able to identify an “objective” cause of disabling pain.
Currently permanent disability benefits compensate for the lifetime disadvantages in competing in an open labor market, not just short-term wage differences. Return to work incentives were included in AB 749 but have not been funded.
The proposed proposal would reduce benefits by 15% for workers who receive an offer to return to work, and increase benefits by 15% if there is no offer to return to work.
“The only real impact of this proposal will be a huge windfall to larger employers, most of which already have return to work programs. This will add significant costs to smaller employers who are unable to take employees back,” said Mark Gerlach, insurance expert for CAAA.
Phony Insurance rate regulation: a trigger that doesn’t work
Current law regulates all property/casualty lines of insurance, except workers’ compensation. Every workers’ compensation company sets its own rates subject to statutory rules that rates may not be inadequate or unfairly discriminate. There is no prohibition against the use of excessive rates, although this prohibition applies to all other lines of insurance in California. The pure premium rates set by the Insurance Commissioner are advisory only.
The reported proposal would require that California declare its workers’ compensation market to be “non-competitive” before regulating rates in any way. There are currently more than 250 insurers selling workers’ compensation policies in California. States that have similar provisions have not triggered regulation.
The major cause of recent rate hikes was the insurance industry’s need to make up for its losses due to an irresponsible rate war and huge investment losses. Competition is not an adequate substitute, and without responsible rate regulation it will not be possible to keep rate at responsible levels and prevent the wild swings seen in recent years. Rate regulation under Proposition 103 – which prohibits the use of excessive rates – has worked very well for many years, assuring fair insurance rates for consumers in lines such as automobile insurance while simultaneously providing adequate profitability for the insurance industry.
“The reported proposal contains only phony insurance rate regulation that would allow insurers to continue to gouge California employers. This is a huge windfall for big insurance. The only way to ensure that these cuts from injured workers are passed on to policyholders, and not pocketed by the insurance companies, is to institute real rate regulation,” said Heller. “There is no premium oversight and no rate rollback in order to guarantee businesses relief from unfair and excessive premiums. There should be prior approval of workers' comp rate changes, regulations similar to those already in place for auto, homeowners, commercial and most other lines of insurance in California. Of the five consumer protections that we had recommended, this proposal includes exactly none.
http://www.capinsurancerates.org/press/index.html
See also:
Cap Insurance Rates and Not Injured workers' Care
http://www.capinsurancerates.org/
California Applicants’ Attorneys Association
Serving California Injured Workers Since 1966
801 12th Street, Suite 201, Sacramento, CA 95814