Dan Walters

Dan Walters: Job injuries war looms in Capitol

Published: Monday, Aug. 20, 2012 - 12:00 am | Page 3A
Last Modified: Tuesday, Feb. 26, 2013 - 8:16 pm

Roughly once a decade, the Capitol's perpetual skirmishing over the system that compensates workers for job-related disabilities erupts into open war – and it's happening this month.

There are five major stakeholder groups in the multibillion-dollar workers' compensation system – employers, unions, insurers, medical care providers and attorneys who specialize in disability cases.

Traditionally, something happens when several groups form a coalition and gang up on the others. It then takes a few years for their new rules to take effect and a few more for a new coalition to be formed to change those rules.

The last time it happened was eight years ago, when a newly inaugurated Gov. Arnold Schwarzenegger, siding with employers, pressured legislators into tightening eligibility for cash benefits and medical care, and then issued regulations that went even further.

The overhaul sharply reduced employers' costs and insurance premiums, but unions, medical providers and workers' comp attorneys have been seething ever since. More recently, insurers have complained about declining profits, or even losses, on workers' comp policies.

With a Democratic governor, Jerry Brown, now in office, those who have chafed under the Schwarzenegger regimen are seeking change, and they have a sympathetic Legislature. But Brown wants business support for his tax-increase measure and has indicated that he would not entertain changes employers oppose.

A 45-point overhaul plan is circulating in the Capitol. It originated with a labor union group and would increase direct cash benefits to permanently disabled workers, raising the cap from $400 a week to $800, while promising employers medical and operational efficiencies to more than offset the $2 billion per year benefit cost.

An analysis prepared for Brown's Department of Industrial Relations, which endorses the plan, pegs net savings at nearly $400 million a year.

But lobbyists for workers' comp attorneys are bitterly opposed, labeling the proposal as worse than Schwarzenegger's changes.

Medical providers also appear to be opposed, while insurers still want higher premiums. Coincidentally, the Workers' Compensation Insurance Rating Bureau is recommending a 12.6 percent boost in premiums.

The outburst of opposition stalled plans to quickly move a bill, and with just two weeks remaining in the legislative session the outcome is uncertain.

If it doesn't happen this year, however, the issue will return in 2013 because that's what the once-a-decade politics of workers' comp will require.

Brown knows the drill. He attempted to overhaul the system during his first stint as governor more than three decades ago. After failing, he signed a $3 billion benefit increase in 1982 that launched the once-a-decade syndrome.

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