Workers compensation board in Alaska moves to lower costs

Workers Compensation Insurance

Last week, they were seeking input from the public in order to gain ideas to reduce the rising expenses.

The Alaska Workers Compensation board reached out to the public last week to help them to build ideas and receive the input of residents to be able to more effectively manage the rising costs associated with the coverage.

Meetings were held by the board members in Anchorage, Juneau, Fairbanks, and Kenai.

The opportunity was taken in those locations to help to gain ideas to help to stem the rising costs associated with workers compensation. Oregon previously conducted a study which determined that among all of the states in the country, Alaska’s premiums were the highest for this form of coverage.

Workers Compensation InsuranceLast year, workers compensation saw costs in Alaska that were $270 million and growing.

These workers compensation costs continued to rise even though there had been a drop in premiums by 3 percent. This was reported by the Alaska Journal of Commerce. The rising costs that are associated with this coverage are not connected to the rates of incidence.

Incidences have been falling steadily since 1994, at which time there had been 30,000, when reported to the 20,000 incidents that were reported in the workplace last year. This, according to Mike Monagle, the director of the Division of Workers Compensation. During that same period of time, there were almost 90,000 jobs added to the employment in the state.

As employment rises, and as the frequency of incidences decreases, costs are still rising. Monagle pointed out that “This frequency rate is really important because it’s the only thing that has been keeping Alaska’s premium rates in check.” Almost 75 percent of “total lost costs” last year were linked with the price of medical care. Previously, 60 percent of the total costs of $260 million that were paid were directed toward medical benefits.

Across the country, the figure is 59 percent of the total costs. The remainder is made up of lost work time costs. Monagle said “Today, in all states, medical is the big cost driver,” when explaining the costs associated with workers compensation. He said that the three areas where costs accumulate are fees, prescription drugs, and overutilization. The rate of specialty medical costs are disproportionately high in Alaska.

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