NASI Study Finds Slow Economy and Medical Spending Affect National Trends
In New Jersey, workers' compensation payments increased to $1,471 million in 2002, a rise of 7.9 percent from the 2001 level of $1,363 million, according to a new report released by the National Academy of Social Insurance (NASI). Workers' compensation pays for medical care and cash benefits for workers who are injured on the job or become ill due to job-related causes.
For the first time, NASI's study shows the change in medical and cash benefit payments separately in each state. Payments for medical care grew faster than cash benefits to New Jersey workers in 2002. New Jersey payments for medical care rose to $759 million in 2002 from $658 million in 2001, an increase of 15.3 percent. Payments to replace workers' lost wages rose to $712 million in 2002 from $705 million in 2001, an increase of 1.0 percent
Total workers' compensation payments in New Jersey rose slightly faster than for the nation as a whole in 2002. Nationally, workers' compensation payments grew by 7.4 percent to a total of $53.4 billion. Spending for medical benefits contributed to the increase in total payments. Nationally, spending for medical benefits rose by 9.4 percent, while cash payments to workers rose by just 5.8 percent.
Workers' compensation pays for medical care and cash benefits for workers who are injured on the job or become ill due to job-related causes. In providing health care and cash payments to disabled workers and their families, workers' compensation is second in size only to the sum of Social Security disability insurance and Medicare.
For the nation, workers' compensation payments rose faster than wages for the second year in a row in 2002. “This occurred in part because wages grew hardly at all, following the economic recession that began in March 2001,” noted NASI Study Panel Chair John F. Burton, of Rutgers University. The year 2002 saw the slowest growth in wages in more than a decade (0.4 percent) and a decline in the number of covered workers for the second year in a row.
Nationally, workers' compensation total payments for cash and medical benefits per $100 of wages grew by eight cents, to $1.16 in 2002 from $1.08 in 2001. This is lower than the peak in 1992, when benefits were $1.68 per $100 of wages.
Total employer costs rose by 13.0 percent in 2002 to $72.9 billion. Costs to employers reflect premiums charged by insurers and benefits plus administrative expenses of employers who self-insure. Employer costs per $100 of wages rose to $1.58 in 2002 from $1.40 in 2001, but still remain well below their 1990 peak of $2.18 per $100 of wages.