CA work comp costs soaring

Amid almost complete failure, the one signature achievement of Arnold Schwarzenegger’s seven years as governor was reform of the expensive workers compensation system. Now that’s gone.

His other promises — to refuse to increase taxes and to “blow up the 麻将游戏 boxes” of massive government waste — were repudiated with record his record $13 billion tax increase to pay for record spending increases. He left office in 2011 with $20 billion deficits plaguing the state, as well as numerous personal and political scandals and the destruction of the Republican party the “post-partisan” governor ostensibly belonged to.

His 2004 work comp reform actually did work at first. According to a report at the time:

At a Boeing Co. aircraft factory on April 19, California Governor Arnold Schwarzenegger (R) signed SB 899, a bill reforming California’s workers’ compensation system. The measure had passed the state assembly 77-3 and the senate 33-3.

“This bill completes a process that brought together Republicans and Democrats, business and labor, and all the affected parties to produce billions of dollars in savings, protect workers, and root out fraud and waste in the system,” Schwarzenegger said in a news release issued the day he signed the bill. “No longer will workers’ compensation be the poison of our economy. Our message to the rest of the country and the world is that California is open for business. We are making our state once again a powerful, job-creating machine.”

Schwarzenegger said the measure “would cut down on fraud and waste, and would also aim to get injured workers back on the job without having to fall back on the legal system.”

“We cannot continue to force our businesses, non-profits, and government agencies to be pummeled by costs 2-1/2 times the national average,” said Sen. Chuck Poochigian (R-Fresno), the bill’s sponsor. “This [legislation] gives California businesses and their workers a fighting chance.”

10 years after

10 years after, it all was for naught. The San Gabriel Tribune reported:

California has been ranked as the most expensive state for workers’ compensation costs, according to a newly released report.

The Workers’ Compensation Premium Rate Ranking Summary from Oregon’s Department of Consumer and Business Services shows that California businesses spend $3.48 for every $100 of payroll issued.

That’s 188 percent of the median cost of $1.85 for all 50 states. California was the third most expensive state in 2012 and the fifth most expensive in 2010.

“California’s workers’ compensation system is incredibly inefficient,” said Jerry Azevedo, a spokesman for the California-based Workers’ Compensation Action Network, which seeks to reduce costs for employers and improve services to injured workers. “It does not do a good job of achieving its goal. For as much as employers pay, they don’t get a lot out of it.”

That also applies to injured workers, according to Azevedo.

“You would think that since California has the highest cost system that we’d also have the most generous benefits — but we don’t,” he said. “We plow a lot of money into the system but too little of it ends up in the hands of injured workers.”

Typical of things in California nowadays, the people “helped” didn’t get any help, while the bureaucracy and the lawyers made out like bandits.

The best year for the Schwarzenegger 2004 reforms was 2008, when California ranked 13th best for work comp costs. But now, according to Azevedo:

Since 2009, premium costs in California have climbed by 41 percent due, in part, to an increasing rate of work-injury claims at a time when the rate of claims in most states has been declining,” he said. “California’s system is experiencing more claims for cumulative trauma and those filed post-employment — particularly in the Los Angeles region. Average costs per claim have increased by $30,000 since 2005.

In California, businesses just can win.