California hearing focuses on workers compensation system

California health insurance

California-InsuranceAt a recent hearing in Sacramento of California’s Assembly and Senate brought focus to the state’s workers compensation insurance system.

The hearing lasted for more than four hours, much of which was spent exposing the shortfalls of the state’s current system and highlighting the need for extensive reform. California’s Worker’s Compensation Institute (CWCI), a non-profit organization that writes worker’s compensation policies for the state, attended the hearing in order to share its views on the current problems facing the system and to discuss the issue of reform.

During the hearing, concerns were raised that the medical costs of worker’s compensation were rising too quickly. Part of this may be due to new laws introduced in 2004 that make significant changes to the system. The system saw further changes in 2008 under Governor Jerry Brown which expanding the accessibility of care for many workers.  CWCI provided data that showed that medical expenses were growing by at least 10% per claim between 2005 and 2009. The rising costs could have a negative impact on the other benefits previous reform efforts had brought to the system.

Senate officials claim that there are several cost-saving measures currently in the works.

Some of these measures are meant to rein in on the costs of medical care. Legislators have not been forthcoming on what these measures are or any specifics on how they would achieve their goals. This information is expected to be released as reform picks up more momentum in the Legislature.

Permanent disability was brought up by the California Labor & Workforce Development Agency during the hearing. Secretary Marty Morgenstern noted that permanently disable workers were not receiving adequate or fair compensation. The agency believes that there is currently enough money in the system to solve this problem without having to force employers to make changes to their payroll policies. This money could be drawn from less vital sectors of the worker’s compensation system or funds could be freed up by encouraging the system to work more efficiently.

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