Newspaper Opposes Changes to MSF

Tuesday, March 28, 2017 | 0

The editorial board for the Missoulian urged state lawmakers not to move forward with bills that would eliminate the Montana State Fund or create a study group to investigate options for converting the state-chartered carrier into a private, mutual company.

Sen. Frederick Moore

Neither proposal is “necessary or even helpful,” the newspaper said in an editorial published on Sunday. And both bills “would destroy the Montana State Fund and put an end to its growing success.”

The Missoulian said it’s unlikely that lower rates would flow from the proposal in Senate Bill 371 to eliminate State Fund. The paper notes that the carrier has reduced rates by 39% over the past 10 years and returned a $35 million dividend to policyholders last year.

But supporters of the bill by Sen. Frederick Moore, R-Miles City, told members of the Senate Business, Labor and Economic Development Committee on Friday that eliminating MSF could cut premiums by up to 40% if the Montana experience is similar to what happened when Nevada and West Virginia got rid of their state-chartered carriers.

Scott Reichner, a former state lawmaker who is now a lobbyist for work comp carrier Victory Insurance, said the private sector would be more efficient and get people back to work more quickly than the bureaucratic MSF. Reichner, who authored the 2011 workers’ compensation reform bill credited with reducing costs by 28%, said Montana’s system remains expensive in part because there is no incentive to get people back to work.

MSF on Friday released a statement saying SB 371 would disrupt the state’s business climate. The statement includes a quotation from Montana House Speaker Greg Hertz, R-Polson, questioning the motives behind the measure.

“It’s difficult to understand the reason for this proposal other than to eliminate competition for the benefit of a few private insurance companies or to backfill the general fund by taking funds held by MSF in trust for Montana businesses,” Hertz said. “This proposal amounts to a raid on money that rightfully belongs to the businesses insured by MSF for the protection of injured workers.”

The Senate Business and Labor Committee tabled the bill on Friday, indicating members have no recommendation on the measure. The committee could still pass the measure to the floor of the Senate at a later date. Or, lawmakers in the Senate could vote to move the bill to the floor for a full vote without action from the committee.

Committee members on Friday also tabled Senate Bill 369, by Sen. Jeffrey Wellborn, R-Dillon, which would create a study group to investigate converting MSF to a private mutual carrier.

The Missoulian said neither measure should move forward until lawmakers have more opportunity to debate the potential impact of the proposals.

“Legislators have some digging to do if they hope to thoroughly understand the implications of privatizing or killing off the Montana State Fund,” the newspaper’s editorial board said. “We are confident that they will learn neither option is a good one for Montana’s employers or their workers.”