Injured Workers' Advocates Call for Insurance Rate Regulation
Call Garamendi Plan "incomplete and flawed"
Injured workers’ advocates today renewed their call for workers’ compensation insurance rate regulation, and called Insurance Commissioner John Garamendi’s proposed changes “incomplete” for failing to include caps on rates, and “flawed” for sentencing injured workers to live in pain, without adequate treatment. “After injured workers’ benefits were cut by more than $5 billion last year, most insurers did nothing but pocket record profits. The Commissioner would reduce benefits to injured workers but allow unlimited profits for insurance companies. Garamendi’s plan includes a floor on rates, but no ceiling, so insurance companies can continue to gouge California employers. That’s not right,” said David Schwartz, President-Elect of the California Applicants’ Attorneys Association (CAAA). “Garamendi’s plan takes away benefits from injured workers, benefits that are already too low. You can cut injured workers’ benefits down to zero, and without regulation insurance companies may not reduce premiums by a single dollar.”
The injured workers’ advocates credited the Commissioner with some positive proposals, including allowing injured workers’ benefits to begin immediately.
They also support the Commissioner’s proposal to increase penalties on employers who fail to carry workers’ compensation coverage. “We agree with Commissioner Garamendi that rooting out fraud is a key to improving the system,” said Schwartz. “And we applaud his proposal to accelerate payments to injured workers. We disagree with his proposal to apply cookie-cutter guidelines to every injured worker, and we don’t see how any reform package can work without rate regulation.”
The injured workers’ advocates said several of Garamendi’s proposals would harm injured workers, including:
-lose the right to medical treatment and wage replacement benefits for pain that prevents the individual from working
-lose the right to a second opinion by a doctor of their choice
-virtually eliminates penalties for insurance company misconduct
-eliminates compensation for consequences of permanent disability
The advocates disagreed with Garamendi’s assertion that litigation is a major cost driver in the system. “Less than 20% of injured workers hire an attorney, and they do so because the insurance company unreasonably denies deserved benefits. Only 2% of total claims involve a formal trial. Injured workers need an expert advocate, or the insurance company will just delay and deny benefits until the worker gives up,” said Schwartz.
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