CA Worker’s Comp Cost Soars 45.3% in Six Months

Richard Rider, Chairman, San Diego Tax Fighters Undesignated 1 Comment

Share

JUNE 12, 2012 7:27PM
CA Worker’s Comp Cost Soars 45.3% in Six Months

RIDER COMMENT:  California state government controls Workers Comp rate increases to contain costs. And how’s that working out for ya, eh?

Since January of this year, rate inceases of 45.3% have been approved. While accusing fingers will be pointed in different directions, the bottom line is that California rates are soaring, and other states are not. Yet another nail in the coffin of the California economy.

http://capoliticalnews.com/2012/06/11/california-workers-comp-cost-raised-by-45-3-why-texas-is-looking-even-better/

California Workers Comp Cost Raised by 45.3%–Why Texas is Looking Even Better
by STEPHEN FRANK on 06/11/2012 ·

California is in a Depression. One reason is the lack of jobs. Now, the Democrats elected Insurance Commissioner is assuring more jobs leave the State.

“California Insurance Commissioner Dave Jones went against a unified front of labor and employer representatives siding with the insurance industry and the Workers’ Compensation Insurance Rating Bureau (WCIRB) in approving a 8.3% increase mid-year rate hike for California employers. Added to the 37% rate increase he approved for January, July and later renewals are facing an average rate increase of 45.3% over last year at the same time.”

The unions and businesses understand this is a job killer—45% increase in workers comp premiums will assure firing of some employees and the non hiring of others.

AB 32, higher taxes, higher cost of doing business—all this adds up to Depression and a boon for U-Haul. Thought you should know about the 45% increase—the mainstream media has not reported this.

—————————

Jones Approves 45% Workers’ Comp Hike for 7/1s

Workers Comp Exec, 6/11/12

California Insurance Commissioner Dave Jones went against a unified front of labor and employer representatives siding with the insurance industry and the Workers’ Compensation Insurance Rating Bureau (WCIRB) in approving a 8.3% increase mid-year rate hike for California employers. Added to the 37% rate increase he approved for January, July and later renewals are facing an average rate increase of 45.3% over last year at the same time.

“Crud. This means we lose all our clients and pick up everyone else’s,” one Orange County broker told Workers’ Comp Executive this morning.

The decision covers policies incepting on or after July 1, and gives insurance companies represented by the WCIRB all that they were asking for in its filing minus two cents. The minor adjustment is being attributed to the State Compensation Insurance Fund’s loss adjustment expenses (LAE), which are typically higher than other carriers’ LAE, and hence skew the overall data.

The decision follows a 37% rate increase that Jones approved for January. The Commissioner and certain industry forces gloss over the magnitude of the increases by explaining how the “benchmarks” or rates for pure premium rates are described. The phraseology changes were made at the commissioner’s request. The Commissioner and carriers express the changes to rates in ‘average rates per $100 of payroll’ but do not compare new rates to the old and therefore omit the true relative increase to employers.

The pure premium rates are advisory and insurers are free to file their own rates. Many follow the advisory, however.

Citing testimony received as part of the rate hearing process, Jones concluded that an increase is necessary as workers’ comp costs continue to increase.

“The primary increase in California’s workers’ compensation costs is with medical costs,” Jones says in his decision. “Per unit medical costs do not appear to be increasing much, but medical utilization appears to be the main driver of overall cost increases.”

That’s particularly troubling in light of the increasing amount insurers spend on services to control medical costs.

“If cost containment tools are not working and costing more than they benefit, we need to know why. I expect the WCIRB to provide further information in the next claims cost benchmark filing that will assist in this analysis as it obtains and evaluates medical cost containment expense data,” Jones said.

Jones also reiterated an earlier call for a balanced approach to workers’ comp reforms. He maintains that any benefit increases for injured workers need to be offset with systemic savings in the form of lower frictional costs and a reduction of medical cost drivers in the system.

Share

Comments 1

  1. So, is the leg really this suicidal? I’m looking at property in Nevada and North D. (they will be voting on prop. tax). Seriously, we all know that none of us in CA own anything with our current laws.

Leave a Reply

Your email address will not be published. Required fields are marked *