Workers' Comp Reform Offers Model for California Health Care

Saturday, September 8, 2007 | 0

Break out the champagne. California is no longer No. 1.

For more than five years, state employers had the dubious distinction of paying the highest premiums for workers' compensation in the nation. That honor now belongs to Alaska.

Workers' comp costs are rising elsewhere across the nation. If the current trend continues, the state should drop out of the Top 10 before the end of the decade.

Gov. Arnold Schwarzenegger and the Legislature aren't getting enough credit for the complex bipartisan reforms that were enacted in 2004. Their legislation has solved what was then seen as California's No. 1 economic problem.

The governor's decision to sit down with leaders of the Assembly and Senate in 2004 and hammer out an agreement provides a model for how California should come together on an equally vexing problem facing California: comprehensive health care reform.

If the complexity of workers' compensation reform made most Californians' heads hurt, the health care challenge will require double doses of aspirin. Health care legislation affects all Californians, not just employers and workers. And unlike workers' compensation reform, any changes to how California approaches health care will require that the state mesh its system to meet the federal government's byzantine requirements.

The current workers' compensation system isn't perfect. Seriously injured workers are still not receiving enough compensation for their injuries. Nor are they being paid promptly enough.

But the governor and the Legislature did well in adopting a less subjective rating system for evaluating injuries, tightening eligibility for permanent disability payments and permitting injured workers to seek immediate medical attention paid for by the employer.

The result: Rates have dropped by more than 35 percent since July 2003. California businesses spent an average of $5.23 per $100 of payroll for workers' compensation premiums in 2002. That number is now hovering at just over $4 per $100 of payroll, while Alaska's has climbed to $5.

Schwarzenegger and leaders in the Legislature had success on workers' compensation by focusing on the big picture. Get the fundamental approach right and work out the details later. That approach offers the best chance of enacting health care reform before the Legislature adjourns in mid-September.

This column first ran as an editorial in the San Jose Mercury News.

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