By JOSHUA CLIFTON, a Chicago-based writer who covers workers' comp and disability issues
From coast to coast, voters went to the polls in the midterm elections on November 2 and could have decided the fate of several workers' comp policies for years to come. Our experts broke down the winners and losers among the key battleground states:
Washington: A battle has been brewing in recent years in the Evergreen State, pitting pro-business advocates against insurance officials in a debate over Washington's workers' comp market. Employers have voiced concerns about steadily rising rates and an Accident Fund--which pays nonmedical claims costs such as wage replacement benefits, vocational rehabilitation, disability pensions and survivor benefits--that some say is teetering on insolvency. The state Department of Labor & Industries (DL&I) fought back hard against those claims, but it didn't stop groups from drumming up support for reforms.
The Building Industry Association of Washington led the charge in collecting more than 240,000 signatures to place the issue in the hands of voters. The ballot measure would have ended the department's monopoly on the workers' comp market and opened the state up to private insurers. The issue, however, didn't resonate with voters, who rejected the ballot measure by nearly 60 percent.
Nicole Mahrt, director of public affairs for the American Insurance Association's Western region, said that the reform effort faced an uphill battle from the beginning, with labor unions and the state trial lawyers' association mounting a fierce opposition campaign.
"We are relieved that the election is over and we can go back to managing the state program," said Renee Guillierie, public affairs manager at DL&I. "The initiative really did increase awareness of workers' comp among voters. A lot more people now understand what it is and why it is so important."
And while the ballot measure failed to pass, Guillierie noted, changes may be forthcoming. The governor has directed the agency to convene a work group of business and labor leaders to take a closer look at fundamental changes that could be made to the state's workers' comp system.
"We believe those recommendations will be offered in the upcoming legislative session," she said.
Joseph Paduda, principal of Health Strategy Associates and popular industry blogger, said the defeat of the ballot measure could have implications outside the state.
"Some politicians in Ohio (another state that does not allow private workers' comp insurers) were watching Washington very closely," he said. "I think they will be less likely to move forward with plans to open up the state to competition. However, there is some speculation that the incoming Republican governor is interested in taking that direction."
California: Despite the Republican tsunami that hit nearly every area of the country, California voters chose Democrat Jerry Brown to once again take the reins in Sacramento. Brown, who previously served as governor of the state from 1975 to 1983, is a favorite of organized labor and is seen by many as less keen to enacting further pro-business reforms to California's beleaguered comp system.
"Brown realizes that the most important thing right now is the economy," Mahrt said. "That being said, he has an important responsibility to make sure the workers' comp system is not ignored. Employers are really struggling to keep up with rising costs, and we hope that he not only works to protect comp reforms, but also look for new ways to reduce those increases."
Because of term limits, many of the incoming state legislators weren't in office prior to the 2004 comp reforms, noted Mahrt.
"We will have to do a good job to educate all new legislators of what was going wrong before the reforms were enacted," she said. "But it is too early to predict what the Democratic majority will want to address. We hope to work together to find common ground to control these costs."
Florida: Republican Rick Scott narrowly defeated Florida's current Chief Financial Officer Alex Sink in the state's hotly contested governor's race. Scott's win likely dooms efforts to address rising workers' comp pharmaceutical costs, which were the target of legislation supported by Sink, according to Paduda.
"With Scott's past history as a medical-care-provider executive and the fact that he received more than $600,000 in campaign contributions from the industry ... (it's) highly unlikely that he will sign any kind of bill that would prohibit price-gouging by physicians dispensing drugs to comp claimants," he said.
New Jersey: Voters overwhelmingly voted to enact a constitutional amendment that will prohibit New Jersey's governor and lawmakers from taking money from the state's Second Injury Fund to shore up budget shortfalls in other areas. Under the approved ballot measure, money in the Second Injury Fund can only be used for its intended purpose.
Oklahoma. Republicans captured all statewide legislative seats on the ballot in Oklahoma, as well as the governorship. Governor-elect Mary Fallin, a current U.S. representative for the state's fifth congressional district, received more than 60 percent of the vote and will become Oklahoma's first female governor.
According to the pro-business candidate, one of her top priorities is to usher in further changes to the state's workers' comp system. In May, Oklahoma lawmakers passed a comprehensive reform package that supporters said will save businesses more than $60 million.
November 15, 2010
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