In the span of less than a decade, the costs paid by Illinois employers for workers’ compensation insurance dropped from third highest in the nation, as compared to other states, to 22nd on the list.
That steep decline in relative workers’ comp premiums tracked with the implementation of a 2011 state law passed at the urging of the state’s business community and intended to cut workers’ comp costs.
But you won’t hear insurance companies and their legislative allies point to this state’s much improved position on the nationally respected ranking of premium rates conducted by Oregon regulators. In their zeal to maximize profits, they would instead have you believe that workers, who already sacrificed long-standing rights as part of the 2011 overhaul, must give up even more.
It’s past time for insurance companies to do what they promised to do seven years ago: be transparent with their pricing and pass along to employers in the form of even greater rate reductions the enormous savings they’ve realized in lower expenditures caring for injured workers. Just consider the results from several recent studies published by noted insurance industry associations, which reveal that treatment expenditure reductions across the board and higher profits for insurers have followed the 2011 rewrite.
The National Council on Compensation Insurance (NCCI), which publishes workers’ comp advisory rates, has since 2011 recommended a cumulative rate reduction of 51.4 percent. Had that been implemented, Illinois employers would have saved more than $2.25 billion in premium costs – a sum much larger than the relative savings depicted by the Oregon study. But private, for-profit insurance companies have refused to reduce their premiums in accordance with their own industry recommendations.
While costs of caring for the injured are dropping, profits are jumping. In 2015 and 2016, insurers in Illinois made nearly $1 billion in profits. There are 328 insurance companies writing workers’ comp insurance policies in Illinois, according to the Illinois Department of Insurance, and insufficient insurance regulation during the Rauner years has made this state even more attractive for them.
Workers’ comp insurance premium costs here are now similar to those of our Midwestern neighbors. The number of new workers’ comp cases filed in Illinois is on a steady decline, down 24 percent since 2011.
Despite all this good news, we are once again hearing calls from the business community about the need for more reforms in the workers’ comp system in Illinois. We do need reform – but this time it must be in the form of insurance reform. Lawmakers should address the commitments made by the insurance industry that weren’t honored and pass meaningful insurance reform that strictly regulates workers’ compensation insurance premiums – not further cuts to the benefits that injured workers receive.
Deeper benefit cuts for injured workers, diminished medical reimbursements and denied claims will only boost insurance industry profits while shifting the cost of caring for injured workers onto the backs of taxpayers through publicly funded programs – a proposition that neither the worker nor the Illinois taxpayer can afford.
This article was first published by Effingham Daily News.