Slog
News & ArtsTuesday, September 28, 2010
Politics Vote No on Initiative 1082
Posted by Alex Fryer on Tue, Sep 28, 2010 at 2:27 PM
(This guest Slog post is by Alex Fryer, a spokesman for the No on 1082 campaign, which is attempting to defeat an initiative to privatize workers' compensation. — Eds)
Initiative 1082 isn’t the sexiest or the easiest measure to understand. But it has a huge impact on everyone who makes a paycheck, signs a paycheck, or cares about progressive values in the state. Bottom line: I-1082 is about people getting hurt at work. If you’ve spent any time at the Haborview ER, you know it’s not that uncommon. Each year, about a 120,000 workers file a claim with the state, which provides medical care, and a portion of lost wages if needed.
In Washington, we have public, non-profit workers’ compensation insurance. The employer pays most of the premium but employees pick up about 28 percent. In return, employers can’t be sued for on-the-job accidents.
I-1082 would allow largely unregulated private carriers into the state. This has been the longtime fantasy of the biggest financial supporters of I-1082, the insurance industry and the ultra-conservative Building Industry Association of Washington (BIAW), which stands to gain millions of dollars in un-regulated kickbacks if I-1082 passes.
The economics behind I-1082 are simple. The only way private carriers can make excess profit from workers comp is to screw injured workers. And I-1082 hands them to tools to do it.
The proponents of I-1082 say private carriers would be able to offer lower rates because they are better at “managing claims.” This is code for: The insurance industry will deny and delay claims to protect their huge profits. There is no way private insurance companies can offer the same benefits (which are established by state law), offer rates better than the state, and still make money.
So read the fine print. I-1082 exempts workers’ compensation insurers from the voter-approved Insurance Fair Conduct Act, meaning these insurers can intentionally delay and deny legitimate claims. That’s in Section 3. But would an insurance carrier ever act so despicably, you wonder? Check out Oregon. In 2007, the state fined AIG (yes, that AIG, the company that took $185 billion in bailout money then took their executives to a getaway spa before handing out bonuses) for intentionally denying benefits to workers who deserved help.
Under I-1082, our state wouldn’t have the same enforcement tools against AIG or any other insurer.
According to the I-1082 website, the measure “provides greater protection for small businesses and injured workers.” This is a total lie. There is, for example, no guaranty fund that protects policy-holders when an insurance carrier goes bankrupt. Why is this important? Because workers comp is one of the most volatile lines of insurance, and carriers go out of business all the time. In the past 10 years, there have been more than $10 billion in insurer insolvencies, and most have been workers comp, according to the Insurance Commissioner.
The Office of Financial Management said it best. If a carrier went bankrupt: “Losses would be absorbed by employers, injured employees and medical providers.”
The BIAW wants I-1082 because, frankly, they need the cash. It’s takes money to fight the protection of endangered Orca and salmon. And trying to pack the state Supreme Court with far right judicial activists ain’t easy. So the BIAW inserted Section 2 (7) which allows the BIAW to set up unregulated fee payments with workers’ comp insurers. According to Insurance Commissioner Mike Kreidler, this is illegal in any other line of insurance.
The BIAW has put in $500,000 to I-1082 so far. It must figure that’s a good investment for the millions of dollars it could wring out of these schemes.
And finally, I-1082 forces small business owners to pay the employee contribution of workers compensation premiums. According to the I-1082 campaign, this will cost employers $315 million. If this thing passes, the increase will go into effect next year, and every year after that, forever and ever. But they don’t want to talk about this too much. So they crank up the quote-machine about competition and the free market and hope no one pays too much attention.
In fact, the proponents of I-1082 hope no one actually reads the initiative or understands what’s at stake. Because once you do, voting No on 1082 is the easiest decision you’ll make come Election Day.
3
did the BIAW buy Eyman's flying monkeys?
5
Otherwise, yes.
6
We should all know by now that if the insurance industry likes a certain policy, it is because they stand to make a fortune from it. Remember the mandatory auto-insurance effort about 20 years ago? Did that really lower insurance rates?
Here's a few facts for those who actually read the Slog ..
First, I-1082 doesn't "screw injured workers." It's just a different way to finance the costs. The proof? The initiative does NOT change benefits, does NOT change the laws by which claims are considered, does NOT change any appeal rights, does NOT change the injured worker's right to choose their own medical provider, does NOT give insurance companies any exemption from either insurance regulations OR from workers' compensation laws (in fact, they're subject to the SAME PENALTIES if they act badly), and it does NOT exempt insurance companies from guarantee funds. The Insurance Commissioner has the regulatory authority to ensure that ANY line of insurance (auto, home, fire, life, etc) pays into a guarantee fund to protect policy-holders for defaulting insurance companies.
Second, this is merely a CHOICE for employers. Employers will be able to choose between private underwriters and the State Fund (like they can in 46 other states). Since when has the progressive community felt it was bad to have choice in anything?
Third, I-1082 does make the employer pay for the approximately 25% of the premium that is currently coming out of the worker's pocket, and that takes effect January 1, 2011 (in two months). In other words, the WORKER gets the benefit of not having money come out of their paycheck, and having it paid by their employer -- that's true if the employer stays in the State Fund or goes with a private insurance company. Oh, and by the way, that's the way it is in all 49 other states ... workers pay NOTHINlG for workers' comp elsewhere, but they do here. It brings a tear to the eye that labor and the trial attorneys are concerned about small business, yet just MONTHS ago were whining in public hearings in front of the Legislature that employees pay a portion of the premium! Can't have it both ways, sorry.
Lastly, contrary to popular belief, the employer community is not monolithic. They constantly fight amongst themselves as to what is "good for business," and what is good for our communities. But this time, with a few notable exceptions, they are united. Why?
I represent employers that self-insure their workers' comp risk (i.e. - bigger, financially sound employers that pay the full workers' comp costs out of their own pocket). By and large, our members do a MUCH better job of managing claims than the State Fund. Our Association supports the initiative because: 1) many of our members operate in multiple states, and want the option to purchase their workers' comp insurance here; 2) the growing number of pensions and long-term disability claims (in an era of total number of claims declining over the past few decades) is bankrupting the system, as evidenced by a fund that pays Cost of Living Adjustments on these liabilities over $11 BILLION in unfunded liabilities; and 3) even proposed modest changes to Washington's nearly 100 year old workers' comp system have been ignored or stomped on by the Governor, Legislature and Department of Labor & Industries. Our members have had enough.
Rational, reasonable changes to the system to improve better return to work outcomes for injured workers, and to reduce these growing, threatening costs to the system need to be considered. I-1082 will provide the impetus to get changes adopted, since the State Fund will finally have an incentive to do what even they privately acknowledge need to be done.
If you're going to make public policy decisions based strictly on the fact that BIAW or AIG is backing a proposal, go ahead. What I've written won't change you mind. But if you understand the importance of employers having a CHOICE in where they get their workers' comp, that workers have more money in their pockets, and that changes need to happen to make the system better, then I think you'll find I-1082 is a badly needed change.
Dave Kaplan
Executive Director
Washington Self-Insurers Association
360.754.6416
www.wsiassn.org
www.saveourjobswa.com
First, the insurance companies would not be "largely unregulated." If you read the text of I-1082, section 10 states that all private insurers who sell worker's compensation insurance in the state would have the same responsibilities as the Department of Labor & Industries.
Plus, the insurance companies would not have free reign to start selling insurance policies in 2012. They would first have to be approved by state insurance commissioner. Items considered prior to approval include the following (from Section 3 of I-1082): 1) adequate financial capacity to make benefits payments, 2) adequate loss prevention services to provide health and safety services to their policyholders, 3) adequate claims management services.
Also, if the insurance companies aren't competitive, our businesses definately are not going to buy their worker's compensation insurance from them. Thus, it is easy to see that competition WILL take place, and any business will be free to return to L&I for their insurance if they are not happy with the private insurance companies.
If L&I is so great, they should be able to easily compete with the private insurance companies. If they can't, well, then we'll have better choices and our state will be better for voting yes on I-1082.
9
'"managing claims.” This is code for: The insurance industry will deny and delay claims to protect their huge profits.'
like putting a priest in charge on an all-boy daycare center.
In Oregon, there is a multi million dollor lawsuit going on for injured workers. Does this mean it goes to the Supreme Court and that takes a long time. The Trial Lawyer's Assoc. probably likes this initiative because they will make more money suing AIG for millions.
AIG has been bailed out with the stimulis. They are greedy CEO's. So why should we pay for their billionaire lifestyle.
I agree that workers comp. does need more competint investigators.
Advertisement
Most Commented on Slog
-
Portland Voters Are Stoopid by Goldy
-
An I-5 Bridge Over the Skagit River Has Collapsed by Paul Constant
-
Rightwing Anti-Gay French Activist Commits Suicide at Notre Dame Cathedral by Dan Savage
-
Why They Break Windows by Unpaid Intern
-
Usually When I'm Sent a Photoshopped Image of a Gun Pointed At Me... by Dan Savage
-
Spoiled Rotten: Star Trek Into Darkness by Paul Constant
-
There Are No Atheists In Foxholes by Dan Savage
-
Tornado Truthers by Dan Savage
-
The Only Thing More Tragic than a Bridge Collapse Would Be a 10 Cent a Gallon Increase in the Gas Tax by Goldy
-
SL Letter of the Day: Did You Think I Was Going To Tell You Not To Come Out? (PLUS: Help Free Kate!) by Dan Savage
Stranger Personals
The Stranger
RSSSeattle Art & Performance Quarterly
A complete guide to Seattle's current art, film, dance, and theater season.
Facebook
Twitter
Comments (13) RSS