Increase in Workers’ Compensation Approved by Legislature; Faces Uncertain Future
The Senate voted 25-13 along party lines yesterday to approve a bill (SB 71) that would increase over five years compensation for permanently injured workers to a minimum of $230 per week from the current $140 per week, the Los Angeles Times reports. The bill, sponsored by Senate leader John Burton (D-San Francisco), also would raise the "array" of benefits for injured workers and implement several cost-saving measures (Tamaki, Los Angeles Times, 9/7). The Assembly on Wednesday approved the bill, also along party lines, on a 47-26 vote (Herdt, Ventura County Star, 9/6). The bill's reforms, which include "cracking down harder on fraud and promoting generic prescription drugs," could save the state $1 billion per year (Guido, San Jose Mercury News, 9/7). The Star reports that California ranks 49th in the nation for benefits paid to injured workers (Ventura County Star, 9/6).
The bill's supporters estimate that the increased benefits would cost state businesses about $1.5 billion annually. However, opponents of the bill say it would cost employers more than $3.6 billion per year. Nicole Mahrt, a Sacramento-based representative for the American Insurance Association, said, "While we support a benefit increase, we think it's not a good time to burden the economy with that, if you're not going to offset it with some real reforms. We'd like the Senate to slow down a little bit and take some time and look at the package the governor has put together" (San Jose Mercury News, 9/7). Gov. Gray Davis (D) has proposed increasing payments by a total of $1.2 billion and cutting costs by about $800 million (Wasserman, AP/Orange County Register, 9/7). Davis, who vetoed two previous worker's compensation bills, will only support legislation that makes "substantial changes to the entire system," Department of Industrial Relations Director Steve Smith said (San Jose Mercury News, 9/7). Burton said he might "tr[y] to force" Davis to sign the bill by "threatening" to launch a November 2002 ballot initiative that would raise workers' compensation rates to the national average, higher than what SB 71 would mandate. Despite the fact that Davis is up for re-election this November, Smith said that Davis is "not worried about any proposed ballot measure." Smith added that the governor would "try to reach an agreement with legislators." The San Diego Union-Tribune reports that the Senate "may delay sending [the bill] to the governor" (Ainsworth, San Diego Union-Tribune, 9/7).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.