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Yes on 1082: Tell lawmakers to work on workers’ comp

Post by Kim Bradford on Oct. 7, 2010 at 7:40 pm |
October 7, 2010 7:40 pm

This editorial will appear in Friday’s print edition.

Citizen initiatives are generally an imperfect way to set state policy, but also sometimes a necessary backstop to inaction by the Legislature.

Such is the case with Initiative 1082, which would set a July 2012 deadline for introducing private competition to the state’s 99-year-old system for assisting injured workers.

No one disputes that workers’ compensation needs reform, yet lawmakers seem in no hurry to make needed changes. Voters will have to take the lead.

Washington is one of only four states that maintain a monopoly on workers’ compensation. The Department of Labor & Industries is now the only option for all but large companies with enough wherewithal to self-insure.

The agency has no incentive to rein in costs – other than to hold off big rate increases that would spark a political backlash. Even that motivation has played out in a convoluted way that has undermined the health of the workers’ compensation system.

Labor & Industries seems to do a good job resolving minor cases, but struggles to get a handle on more serious claims.

Workers who are injured badly enough to miss more than three days of work now spend an average of 280 days off the job, up from 266 days just last year. That’s at least twice the national average. In fact, about 8 percent of the system’s claims now account for 88 percent of workers’ compensation costs.

Businesses are bearing part of that burden, but not near as much as they would be paying under a true accounting of the system’s costs. Labor & Industries’ last rate hike of 7.6 percent was only a third of what financial experts advised was needed to keep up with increased expenses and investment losses.

Employers worry that the bill will eventually come due. They were bracing for another big – but probably still inadequate – rate increase this year, until Labor & Industries put off its usual September announcement until after the election.

Agency officials claim they are trying to stay out of the I-1082 debate; they accomplished just the opposite by withholding a key piece of information about its management of the current system.

Experience elsewhere shows that when workers’ compensation markets are opened to private competition, businesses see their costs for insuring workers drop or stabilize.

That’s why the business community overwhelmingly supports 1082 – despite the fact that it will initially add significantly to their bill for workers’ compensation by transferring the share now paid by employees to employers. Many companies are willing to take the one-time hit for what they hope is more certainty down the line.

I-1082 by itself wouldn’t overhaul the workers’ compensation system. But introducing private insurers to the mix will inevitably lead to greater efforts to get injured workers back to work and force discussions about how to make the system more efficient.

The initiative establishes a task force that could consider such changes. The panel also could – and should – address opponents’ concerns that I-1082 doesn’t provide enough regulatory oversight or consumer protections.

If I-1082 passes, the onus would remain on the Legislature to improve the workers’ compensation system – only this time, lawmakers would face a ticking clock.

The News Tribune recommends a yes vote on Initiative 1082.
Read earlier endorsement editorials at www.thenewstribune.com/endorsements.

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