2012 California Workers' Compensation Report
Entering 2012, it is good to think about what the future holds for California Workers' Compensation rates. Two questions stand out:
- What is the impact of current changes made to the Workers' Compensation base rate?
- Is there any better understanding on the effects of the Health Care Reform Act on Workers' Compensation?
Workers' Compensation Base Rate
This Year, the Workers ' Compensation Insurance Rating Bureau adopted base rate changes representing a rate increase of 37 %. Already carriers have increased rates between 2% and 20% and the chance exists for more changes moving forward.
These rate changes have impacted most businesses and will have an even larger consequence on businesses with high experience modifiers. This emphasises how important it is to maintain solid safety and risk management programs.
Health Care Reform
There are potential positive and negative outcomes for Workers' Compensation as a result of health care reform change.
Positive Aspects:
Harry Shuford, chief economic expert for the National Council on Compensation Insurance, pointed out in a delivery at The Ratemaking and Product Management Convention, that the health care reform law is a "totally new healthcare system that appears to have material implications for the future of healthcare delivery in the U.S."
- Workers' Compensation costs may lessen as a consequence of the reform since medical claims are such an enormous part of Workers' Compensation costs.
- Workers' Compensation share of hospital expenses is tiny and shrinking and Workers' Compensation is only 3 % of all health care spending in the U.S. in total.
- The Patient Protection and Affordable Care Act includes facets of administrative simplification and standardization, which can have a potential positive impact on California Workers' Compensation rates.
- Medicare costs are going to be changed somewhat less often which should also help to hold down overall expenses.
Negative Aspects:
Swiss Re notes there are potential negative and unforeseen results to reform in the report, "The Impact of U.S. Health Care Reform on Workers ' Compensation and Other Casualty Lines"
- As govt. mandated cost containment starves the provider community, insurers could have to deal with cost shifting into the Workers ' Compensation system.
- Medicare reimbursement levels are marginal for the medical profession now. As these lessen, this may pressure providers to cost shift wherever possible and the Workers ' Comp system is a fat target.
- Individual workers do not bear the weight of costs and they don't have any reason or motivation to review the expenses for any services they receive. Without buyer oversight, cost shifting to the Workers ' Compensation system becomes easier.
- As more individuals use the healthcare system with healthcare needs, the percentage of patients to medical professionals is likely to increase creating an impact on availability of care.
- Cost cutting will make healthcare practitioners less likely to take part in occupational medical networks that offer reduced rates off fee schedules.
The Cure for The Unknown
It's critical to notice that health care reform faces many in opposition and while it is be the law of the land today, it might readily see changes if there is a major repositioning in the political leadership of our country.
The best strategy during uncertain times is for each employer to ensure their business has developed and implemented effective risk mitigation programs, that may allow them to minimize exposure to any potential Workers ' Compensation premium increases springing from rate changes and healthcare reform.
Last Thoughts
As the New Year starts, be totally certain to perform a fast review of your policies and practices:
- Are you working with an Independent Insurance Agency that will help you find the best California Workers ' Compensation solution between different carriers for your particular situation?
- Do you have well-established programs to help you mitigate your risk profile?
- Have you got continuing worker education that serves to re-emphasize the significance of creating and maintaining a safe place of business?
If you are doubtful of what you may face due to the changing Workers ' Compensation landscape or if you haven't taken a tough look at your risk control in a while, we at ISU Bob Gabriel Insurance are here to help. We offer both expertise and access to the best Workers ' Compensation insurance carriers and would welcome the chance to review your present policies and help you move into 2012 with confidence that you have the best Workers ' Compensation program in place to meet your needs.
- What is the impact of current changes made to the Workers' Compensation base rate?
- Is there any better understanding on the effects of the Health Care Reform Act on Workers' Compensation?
Workers' Compensation Base Rate
This Year, the Workers ' Compensation Insurance Rating Bureau adopted base rate changes representing a rate increase of 37 %. Already carriers have increased rates between 2% and 20% and the chance exists for more changes moving forward.
These rate changes have impacted most businesses and will have an even larger consequence on businesses with high experience modifiers. This emphasises how important it is to maintain solid safety and risk management programs.
Health Care Reform
There are potential positive and negative outcomes for Workers' Compensation as a result of health care reform change.
Positive Aspects:
Harry Shuford, chief economic expert for the National Council on Compensation Insurance, pointed out in a delivery at The Ratemaking and Product Management Convention, that the health care reform law is a "totally new healthcare system that appears to have material implications for the future of healthcare delivery in the U.S."
- Workers' Compensation costs may lessen as a consequence of the reform since medical claims are such an enormous part of Workers' Compensation costs.
- Workers' Compensation share of hospital expenses is tiny and shrinking and Workers' Compensation is only 3 % of all health care spending in the U.S. in total.
- The Patient Protection and Affordable Care Act includes facets of administrative simplification and standardization, which can have a potential positive impact on California Workers' Compensation rates.
- Medicare costs are going to be changed somewhat less often which should also help to hold down overall expenses.
Negative Aspects:
Swiss Re notes there are potential negative and unforeseen results to reform in the report, "The Impact of U.S. Health Care Reform on Workers ' Compensation and Other Casualty Lines"
- As govt. mandated cost containment starves the provider community, insurers could have to deal with cost shifting into the Workers ' Compensation system.
- Medicare reimbursement levels are marginal for the medical profession now. As these lessen, this may pressure providers to cost shift wherever possible and the Workers ' Comp system is a fat target.
- Individual workers do not bear the weight of costs and they don't have any reason or motivation to review the expenses for any services they receive. Without buyer oversight, cost shifting to the Workers ' Compensation system becomes easier.
- As more individuals use the healthcare system with healthcare needs, the percentage of patients to medical professionals is likely to increase creating an impact on availability of care.
- Cost cutting will make healthcare practitioners less likely to take part in occupational medical networks that offer reduced rates off fee schedules.
The Cure for The Unknown
It's critical to notice that health care reform faces many in opposition and while it is be the law of the land today, it might readily see changes if there is a major repositioning in the political leadership of our country.
The best strategy during uncertain times is for each employer to ensure their business has developed and implemented effective risk mitigation programs, that may allow them to minimize exposure to any potential Workers ' Compensation premium increases springing from rate changes and healthcare reform.
Last Thoughts
As the New Year starts, be totally certain to perform a fast review of your policies and practices:
- Are you working with an Independent Insurance Agency that will help you find the best California Workers ' Compensation solution between different carriers for your particular situation?
- Do you have well-established programs to help you mitigate your risk profile?
- Have you got continuing worker education that serves to re-emphasize the significance of creating and maintaining a safe place of business?
If you are doubtful of what you may face due to the changing Workers ' Compensation landscape or if you haven't taken a tough look at your risk control in a while, we at ISU Bob Gabriel Insurance are here to help. We offer both expertise and access to the best Workers ' Compensation insurance carriers and would welcome the chance to review your present policies and help you move into 2012 with confidence that you have the best Workers ' Compensation program in place to meet your needs.
About the Author:
Since 1936, ISU Bob Gabriel Company, an independent insurance agency, has been serving the business insurance requirements of companies in Southern California including Santa Monica, Pacific Palisades, Brentwood, Mar Vista, Westwood, Malibu, West L. A. , Beverly Hills, Marina Del Rey, San Fernando Valley and the Greater L. A. Area. ISU Bob Gabriel Company has over 60 years of expertise assisting clients with their workers' compensation needs. Our staff is highly experienced in workers' compensation and understands the controls required to produce the best outcomes for our clients and their employees.
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