To the Editor:
In his budget address today, Gov. Bruce Rauner once again called for changes to the state’s workers’ compensation system, but missed an opportunity to spotlight the real problem with that system: insurance company profiteering. The insurance companies have exploited insufficient oversight and, since a 2011 rewrite of state law, have taken most of the savings for themselves as profits, rather than passing along their reduced cost of doing business to employers.
According to a report last year from the governor’s Department of Insurance, workers’ comp insurers saw profits jump nearly 22 points between 2010 and 2014, from negative 11 percent to positive 11 percent, while between 2011 and 2015 they reduced their financial payouts on claims to below the national average.
The governor said Illinois should emulate Massachusetts. However, following its lead would come at a great cost to taxpayers. Massachusetts doctors who care for those injured on the job are the lowest paid in the nation, which raises concerns about access to quality care. If Illinois further reduces the rate doctors are compensated to treat injured workers to match Massachusetts’ levels, a patient’s choice of physicians will be seriously limited and wait times for treatment are sure to rise significantly.
Cutting benefits, lowering medical reimbursements and denying more claims only further bolsters the insurance industry’s profits. These types of cuts would shift to taxpayers, through Medicaid and other publicly funded programs, the responsibility for the resulting medical bills and income support payments. The result is a race-to-the-bottom with lower-income states that leaves everyone, except insurers, worse off.
There are 332 insurance companies writing workers’ compensation insurance in Illinois, more than any other state. Our state is an attractive place for them to do business precisely because of insufficient oversight and laws that put their interests ahead of Illinois’ workers and employers.
The 2011 changes to Illinois law forced workers to give up longstanding rights and protections in exchange for lower insurance costs for businesses. However, insurance companies are taking advantage of both workers and employers. Legislative efforts concerning workers’ comp should focus not on further eroding the rights of the injured, but on improving workplace safety and oversight of workers’ comp insurers.