Governor claims Calif. workers’ comp changes ‘huge success’
California Gov. Arnold Schwarzenegger declared the sweeping workers’ compensation changes he pushed through the Legislature two years ago a “huge success,” but critics called them a disaster for injured workers.
“Governor Schwarzenegger broke his promise to protect injured workers,” said Mark Hayes, president of Voters Injured At Work, a group that represents employees who suffer job-related injuries. “He has not fixed workers’ compensation, as he claims, but has made things worse for Californians injured on the job.”
Schwarzenegger said when he took office in 2003 high workers’ comp insurance rates were driving businesses out of the state and costing jobs.
“Our economy was going downhill because of it,” he said.
He credited himself and legislative leaders for turning the system around and cutting insurance rates by 40 percent.
“This is a huge success because of the bold leadership of everyone coming together,” he said at a news conference. “Because of that, we have new business coming back again to the state of California. … We’ve created a positive business environment in California.”
But the actual drop in employer costs may be less than the 40 percent cited by Schwarzenegger. State Insurance Commissioner John Garamendi said last November that workers’ comp insurers had cut their rates 26.7 percent on average since mid-2003 despite a 46.2 percent drop in the cost of paying claims.
Nancy Axtell, director of safety and risk management for Pride Industries, a Roseville firm that hires the disabled, said her company’s insurance claims costs had dropped 40 percent.
But other small employers report no changes in their rates or even increased costs.
Surveys by Union Bank of nearly 2,000 small businesses found 92 percent of those questioned in 2005 and 85 percent surveyed in 2006 reported their workers’ comp insurance rates had either remained the same or increased.
“There’s always exceptions to the rule, but the bottom line is there’s been an average of 40 percent drop in workers’ comp costs,” Schwarzenegger said.
Critics said that much of the savings went into insurance company profits while injured workers have seen their benefits cut and treatment delayed.
Ignoring injured workers
Dr. Mark King, a Sacramento physician who spoke by telephone at a news conference organized by critics of the legislation, said the vast majority of his workers’ comp patients are not receiving adequately or timely authorization for care.
“They are simply in general ignored, to be honest,” he said.
In another criticism, the state Commission on Health and Safety and Workers’ Compensation reported in February that regulations adopted to implement part of the bill had cut benefits for permanently disabled workers by 50 percent.
Schwarzenegger said the changes brought on by the 2004 legislation had resulted in more accurate diagnoses and prevented patients from exploiting the system.
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