August 10, 2005: Headlines: Figures: COS - Ethiopia: Insurance: State Politics: Tracy Press: Garamendi steps lightly in Worker's Compensation minefield
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August 10, 2005: Headlines: Figures: COS - Ethiopia: Insurance: State Politics: Tracy Press: Garamendi steps lightly in Worker's Compensation minefield
Garamendi steps lightly in Worker's Compensation minefield
Insurance Commissioner John Garamendi, by the nature of his office, cannot escape the work comp minefield, but as he eyes running for lieutenant governor next year, he’s dancing carefully through it, as demonstrated by an hour-long telephone news conference he staged Monday to release data on declining work comp costs.
Garamendi steps lightly in Worker's Compensation minefield
Garamendi steps lightly in minefield
Dan Walters
Published on Wednesday, August 10, 2005, in the Tracy Press.
SACRAMENTO — California politicians know — or soon learn the hard way — that workers’ compensation is, despite its nondescript name, a political minefield through which one treads very carefully.
Work comp, as it’s known inside the Capitol, is the multibillion-dollar system that provides medical care and sustenance to those with work-related injuries and illnesses. Its immensity and the fact that politicians control the size of the pie and who gets which slice have made it a permanent fixture of Capitol politics.
Lobbyists for employers, who pay the work comp tab, and those for labor unions, insurance companies, medical-care providers and attorneys who specialize in workplace injuries joust constantly over the rules governing the system. And since any change in the status quo must, by its nature, financially benefit one or more of the contending factions and reduce the slices of others, a politician who dips into work comp will find himself on someone’s enemies list.
Gov. Arnold Schwarzenegger plunged into work comp on virtually his first day in office and a few months later, scored what is — at least to date — his only lasting accomplishment. Schwarzenegger championed employers who were angry over steep hikes in work comp insurance premiums and, using the threat of a ballot measure to radically overhaul the system, worked out a deal with the Democrat-controlled Legislature for changes.
Ever since, Schwarzenegger has hailed work comp reform not only as a political achievement, but also as playing a major role in persuading employers that California was friendly to business.
The centerpiece of the 2004 work comp overhaul was tightening medical standards for determining disability and thus eligibility for long-term benefits — reducing payments to some, generating a nonstop chorus of complaints from unions and work comp attorneys and giving Democratic legislators a disingenuous excuse to renounce what they wrought. The angst has been melded into the wider political war that pits Schwarzenegger and business groups against Democrats and unions, over Schwarzenegger-sponsored ballot measures on the November special election ballot.
Insurance Commissioner John Garamendi, by the nature of his office, cannot escape the work comp minefield, but as he eyes running for lieutenant governor next year, he’s dancing carefully through it, as demonstrated by an hour-long telephone news conference he staged Monday to release data on declining work comp costs.
Democrat Garamendi said that since the Schwarzenegger reforms (and others, signed by predecessor Gray Davis) were enacted, costs had declined by upwards of 40 percent and premiums had been reduced by nearly 27 percent and suggested that insurers — especially the huge, quasi-governmental State Compensation Insurance Fund — should reduce them further.
“There’s more relief possible for employers,” he said. “The employers have not seen the full benefit of the reforms.”
SCIF writes half of the state’s more than $15 billion in work comp insurance and had been under pressure from Garamendi to bolster its reserves, which it is doing by reducing premiums more slowly than Garamendi apparently would like. And that illustrates one of the tradeoffs inherent in the system.
The larger conflict, however, is that the dramatic drop in work-comp costs is largely coming out of the pockets of disabled workers and their attorneys. As Garamendi calls for greater rate reductions, therefore, he’s indirectly endorsing financial cutbacks that anger two important Democratic Party constituencies. Several reportorial questions attempted to draw him into the controversy over those reduced benefits, but Garamendi sidestepped and said he was concerned with whether insurers are paying their obligations, whatever they may be, and is monitoring complaints about disability ratings and payments.
The more Garamendi calls for reducing costs to employers, the more he potentially alienates those on the other side of the perpetual work comp struggle — but were he to take up the union-attorney demands to modify the 2004 reforms, he’d risk rancor from the business community. As he knows and Schwarzenegger has learned, work comp is, politically, a no-win situation.
• Dan Walters is a state Capitol columnist for the Sacramento Bee. His e-mail address is dwalters@sacbee.com.
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Story Source: Tracy Press
This story has been posted in the following forums: : Headlines; Figures; COS - Ethiopia; Insurance; State Politics
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