No Fault Workers' Comp

[Zeke]

Teh thread on CA (which will undoubtedly be moved here) started me thinking. Business is leaving CA at hemoraging rates. American Racing (the wheel company) announced that they were laying off 300 and moving production to Tiajuana. That is about 3/5 ths of their work force. the reason is two fold: Wages and WC insurance.

BUT, they were making money while paying many of the to be laid off folks $30/hr. So, the doubling and redoubling of the WC ins is the killer. A restaurant that employs 50 has seen a 800% increase in WC rates in 5 years. $17,000 anually to $140,000!

How would a no-fault WC system work? You get hurt, you see a doctor. Your doctor, no WC doctors and no attorneys. No court time, no Workers' Compenstion Appeals Borad. State funded from ins premiums. For those of you out of state, we already have a quasi state owned insurance co. called, "State Fund."

The only other thig I can think of is the high cost of medical treatment. That's a scam as well. My wife's recent surgery was billed out for thousands and they accepted hundreds from our med ins + a small copayment.

What about no-fault?

[widebody911]

To my uneducated (I've never deal with the WC system) eyes, workman's comp appears to be a lottery perpetuated by the ambulance chasers and people who want to get paid for sitting on their ass at home, similar to the traffic lottery, where you win when someone bumps into the back of you during rush hour.

So to really fix it, you'd have to have tort reform. I'm laughing so hard right now I can hardly type...

[Zeke]

TORT REFORM? Who'd vote for that? The lawyer/politians? I'm wondering if we can just stop the thing in it's tracks. You want to see a lawyer? Fine, let him pay for your doctor. Otherwise, you walk in to anyone who accepts insurance or Medical and get treated. The money extorted from employers for "insurance" can be used directly to pay for med care. And then go back to work. Can't work? Get unemplyment. If you didn't work long enough to be elegible for unemployment, TFB. Kinda levels things out a bit, eh? Do I get dick if I hit the wall at Willow Springs? You betcha. I get dick. Do I get WC if I fall off a ladder working for you as a contractor? Hell no, I can't cover myself (the owner of a sole proprietorship) with WC insurance. BTW, that's how I survive, I work alone. Rates for a carpenter have reached about $40 a hundred. I pay some lame ass $15/hr and send $50 a day to the insurance co. (just for comp). That's 250 a week! People live on that in some parts of the country. So, I charge you my cost + O&P and this jerk is $250 a day on your bill. Now you don't want me any more, so some uninsured bloke with Jose and JosB from the Home Defect parking lot shows up to do your work. Would you stand for the same senario when it comes to having work done on your Porsche?

I'm just sorting through this. Something has to be done. What are your thoughts?

[pbs911]

I've been through the WC system. Beleive me it is not a lottery ticket. I was really hurt, to the point I couldn't even standup for weeks. That happen about 12 years ago and I still have problems. The problem was I was not able to receive any legitimate medical attension for 10 days after the accident. Until that time I was required to receive treatment solely thru my employer's doctor. Even then the WC insurance fought me to receive any medical attention or for the pittance I wasentitled to receive for not being able to work. I was forced to find an attorney to receive medical attention. If I had suffered the same injury outside of work, say in a car accident, I would have been a millionairre. Because WC is designed to protect the employer, I recovered less than the cost of a new truck.
With attorneys handling WC cases, you have a double edge sword. In Ca, plaintiffs attorneys are no longer getting rich due to changes made by the CA Supreme Court that limited liability. Plaintiffs WC attorneys have to handle thousands of case to make a living. They are not getting rich. The claimants are not getting rich. The defense attorney have the ultimate conflict of interest. Required to bill a minimum hours, they have no incentive to resolve a case. The longer they have a case the longer they can bill.

I deal with insurance companies every day. I can't believe how many are in liquidation or leaving Ca. But then again they are in it for profit. Insuarance companies do not like to pay, only collect. If you look at Insurance companies such as AAA they prosper because they are not profit orianted. They are there to respond to claims, not to make the CEO and other officer's wallet fat.

For me the problem lies in the insurance companies. The entire system would probably benefit from a State fund that operates at a non-profit level. Put govt attorneys and doctors on the case and respect a claimant's rights to medical treatment and some form of compensation. The problems comes with the cost incurred by fighting a claimant each step of the way. Do you need to spend $3K on a deposition, $1K on written questions, $1k for correspondence, $3k for court appearances, and $4K to get a Dr. to make an IME when the total compensation to the claimant is under $20K? Eliminating the process won't help. Eliminating insurance companies from fighting WC appeals board denies an individuals constituional right to due process. It won't and can't happen.

Everyone has a stake in the claim. The doctors, lawyers and claimant. Whe nthe smoke clears, the compensation is divided up. As pointed out it is not uncommon that bills are padded since they know they will actually receive less. Using one's medical insurance will not work because the individuals medical insurance company will just sue the employer to recoup since they are the cause of the accident.

[Zeke]

Well, now that you have succinctly defended the current system, we'll just sit back and watch the employers vacate the state until the whole place is bankrupt. And where will the money come from then? When your Latino gardener starts paying WC premiums and your lawn bill is a $1000 a month, things will get better from there?

The first step to resolving a problem is to realize there is a problem.

[pbs911]

Not defending the current system, but rather support the restructuring the system. WC is out of control, as is unemployment, welfare and every other gov't entitlement program. It's a matter of profit and losses. Currently the profits are made by the insurance company - i.e. increased premiums. The losses are had by the business ower and ultimately the consumer who must absorbe the increased WC premiums paid for by the employer. the real loss is when the employer can no longer afford the premium and moves or goes out of business. This limits competition. i beleive that's why you see such a increase in foreign state businesses doing well in Ca. They can pass off the increased costs such as WC through profits earned in other states yet have a stronghold in the Ca economy. This allows them to drive out the Ca based competition.

What I was trying to convey is the WC sustem would benefit by a State funded program that is not run for profit. Currently all players in the WC game are in it for profit (i.e. attorneys fees, doctors, insurance companies.) Eliminate the profit players by replacing them with players who work at cost and you can reduce the cost to everyone. A State fund where all fees are regulated would work. What is driving up WC insurance rate is not the adollar amount of the claims, those have been set be statute a long time ago, rather it is the doctor, lawyer and insurance company who seek profits out of a claim. I compeltely agree that the funds currently paid to insurance companies would be better of going into a state fund.

I think the issue is much more fundamental and spans WC and all gov't entitlement programs. Such programs should be available only to those who are legaly entitled to them. If you are not entitled to be employed, it makes no sense that you are entitled to the benefits of gov't based programs. Period. Your hurt TFB.

[DByers]

Yes, The WC system is in the tank. Ofcourse look at the general state of CA. My customers are Electrical Contractors for the most part (Im in supply). Within the last year several have downsized to help reduce the cost of WC. Some have gone out of business, gone to work for someone else, moved to Texas or Florida (they seem to the most moved too states), most have raised their rates. The big problem right now is the unlicensed and uninsured doing work. Home owners are more than wiling to take the risk, which is huge, to get the work done a little cheaper. That work also tends to be under the table, so no taxes are being payed. Most of these guys are handymen and are "doing it on the side". Just trying to pay the bills they say.
As I understand it, there are only 2 company's left that will actually write you WC insurance if you are in the contruction trade. So their rates are sky rocketing.
Dont look for the WC problem to be addressed anytime soon, we have to get a government in Sac town that can actually do something first.
Just my .02

[Zeke]

What happened to no-fault auto insurance? No one want to cut out the middleman (lawyers)? Don't some states have NF auto ins? What is their WC ins like?