New workers' compensation laws leave workers less protected, but allow states to compete for jobs. Default by states, employers and insurers on the “Compensation Bargain” leaves workers and taxpayers holding the bag.
Workers' compensation insurance has been “reformed” in most states since the 1970s. The goal of reform was to lower the cost for employers, thus allowing the state to compete against other states for jobs. The competition between states for jobs has become a race to the bottom, and changes to workers' compensation insurance leave in place far too few protections for injured workers.
What Do Workers Comp Reforms Mean For Workers?
The “reforms” leave the worker with lower wage replacement benefits and less medical care for their injuries. Consequently, workers are newly exposed to devastating financial consequences from potential injuries at work.
Workers Comp Reforms = Reduction in Benefits, Less Income Replacement, Less Medical Bills Covered
Before workers' compensation statutes were enacted, a worker could sue in negligence for their full injury, lost wages, and medical care. The workers' compensation statutes were seen as a “grand bargain”, and a good protection for the worker, under which the worker gave up her right to sue in negligence, in exchange for a no fault system where the lost wages and medical bills would be covered by insurance for any injury at work.
Reduced Benefits Mean Less Income For Those Who Need It Most
Recent “reforms” reduce the amount of lost wages being replaced, and restrict the amount of medical coverage for the injury. These reductions amount to a stunning default on the grand bargain, and raises the question, have they gone too far? We think so.
See a recent investigation into workers' compensation “reform” by Michael Grabell of Pro Publica and Howard Berkes of National Public Radio. According to the authors, costs for wages and medical bills that should be borne by workers' compensation insurance have through these “reforms” been shifted to Social Security Disability, Medicaid, and Medicare. Berkes and Gabell conclude that not only is the injured worker is victimized by these ”reforms”, but also American taxpayers.
For more information on this topic, read “The Demolition of Worker’s Comp” by Grabell and Berkes.
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