March 19, 2004

Commentary

Added Insult to Injury Destroying California’s Economy

By: Assemblywoman Shirley Horton

As California families struggle to make ends meet, none should have to face the dual nightmare of the breadwinner becoming injured on the job and then being failed by the workers compensation system.

And as we in Sacramento work to turn California’s economy around, we are faced with the startling truth of just how bad things have become. This is no longer an isolated problem. Businesses, schools, non-profits, charities, and public safety agencies across California are all affected by the workers compensation crisis. According to a study commissioned by the California Business Roundtable, forty percent of executives surveyed planned to move jobs out of the state and half will not add jobs within the state. Their primary complaint: the high cost of workers’ compensation.

California’s workers compensation costs are the highest in the United States at twice the national average. The system is paying for lawyers and litigation - not providing better benefits to injured workers. The bottom line is that there is too much fraud and abuse, too many illegitimate claims, and too much money going to people who simply don’t deserve it. Our economy is crippled by a burdensome workers comp system that prevents California’s economic growth and costs us more and more jobs. In 1999, the tab for treating injured workers was $11 billion. Today, that cost is nearly $28 billion.

However, there is hope on the horizon. Governor Schwarzenegger made it one of his initial, top priorities to find a comprehensive solution, and after years of delay and inaction, it appears that my colleagues in the Legislature are finally getting serious about addressing California’s out-of-control workers’ compensation system.

Currently, the Legislature is considering two common-sense reform bills proposed by Governor Schwarzenegger and carried by Senator Chuck Poochigian and Assemblyman Abel Maldonado. These Workers’ Compensation Reform bills will reduce the costs by mandating the use of objective medical findings, using guidelines to improve consistency of awards, and limit permanent disability awards to people who return to work or who refuse to work when able. This bill makes systematic changes throughout the system, including the addition of independent medical review and an independent audit. It also increases benefits to the most severely injured workers, and further enhances those benefits after the cost of California workers’ compensation system has returned to a reasonable level.

The governor has set a deadline for a solution, or he will take the issue to the people this November. I agree with the Governor’ that his timeline is focusing attention and cultivating the bipartisan progress that has thus far been achieved.

The people of California deserve a comprehensive workers comp reform package now, and I will do everything in my power within the Legislature to help provide one.

Shirley Horton represents the 78th Assembly District.

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