By Frank D. Russo
The California Supreme Court just handed insurance
carriers another windfall in the state's workers' compensation system a major
victory in an interpretation of
899, the "reform" bill passed three years with a middle of the night
hearing and next to no debate on the floor of either house of the legislature
without the bill being in print or read by virtually all who voted on it. The
result is that a worker who had a leg amputated as a result of an on the job
injury will receive $3360 in compensation for his permanent injuries.
If anyone needed any further proof that the workers'
compensation system needs abolishing, and that we should return to the pre 1914
system where workers could sue their employers for injuries sustained on the
job, this is it. Workers' compensation was a progressive reform brought about
by Hiram Johnson who was Governor of California a century ago. A bargain was
struck: Workers gave up their right to sue employers where they had to prove
negligence, and in return were promised an adequate system of benefits for
their injuries and the medical treatment needed without delay.
Workers are getting neither of these. Even before this
court decision, benefits were inadequate and there were so many delays in
providing medical care that workers with other insurance, even with
deductibles, were better of using their own insurance rather than relying upon
that denied, delayed, and sometimes authorized under workers' compensation.
I know this, because for 26 years I represented injured
workers as an attorney and often presided as a Workers' Compensation Judge, pro
tem. Even defense attorneys, those hired by insurance carriers or employers,
would admit that the system provided far too little to the vast majority of
seriously and permanently injured workers.
You can read about today's Supreme Court's ruling in the
case of Welcher v. Workers' Compensation Appeals Board in
WorkersComp Zone, a blog
maintained by Julius Young, an attorney who practices in this field.
Benefits to Permanently Injured Workers Down
50-70%, Insurance Profits Up
The State of Californias Commission on Health &
Safety & Workers Compensation studied 30,000 permanent disability
cases and found that the Schwarzenegger Administrations workers
compensation permanent disability schedule reduces permanent disability
benefits by more than 50%, and was not based on empirical evidence, as required
by SB 899
The commissions findings parallel several prior
studies showing that Schwarzeneggers schedule reduces permanent
disability compensation by an average of 50% to 70%.
Meanwhile, insurers pocketed more in profits in 2005 (the
last full year for which data is available) than they spent on either benefits
to workers or expenses. Insurers pocketed $9.8 billion in profit, before
investment income. Insurers only spent $8.5 billion on injured workers
benefits. During just the first two years under SB 899, workers
compensation insurance companies in California have earned $20.7 billion in
profits, exclusive of investment income.
Governor Schwarzenegger Claims Decision as
Governor Schwarzenegger said: "Today's ruling is a huge
victory in protecting the successful reforms to the workers' compensation
system that the legislature and I accomplished together three years ago. Thanks
to these reforms, we have eliminated a poison to our economy and cut premiums
by almost 65% - resulting in more than $15 billion in savings."
I'm sure Mr. Welcher will be happy to hear that, along
with countless other workers whose lives have been permanently altered along
with that of their families.
Govrnor, put yourself in his shoes, and do something to
bring this system back into balance. Seems to me that you have thrown the baby
out with the bath water. A lot of people are hurting--and that is not needed
for a strong economy.
For further reading, consider our past articles on this
topic, some of which include links to injured workers testifying before
committees of the state legislature. I'm sure you will be hearing more about
this on these pages and elsewhere.
DISABILITY BENEFITS ARE INADEQUATE FOR PERMANENTLY INJURED
WORKERS IN CALIFORNIA: We Don't Need to Study This to Death
Californians Injured on the Job Are Suffering
Speaker Núñez Makes Statement Regarding
TWO-YEAR EVALUATION OF GOVERNOR SCHWARZENEGGERS WORKERS
Injured Worker Says 99% Reduction of Permanent Disability
Payments is a Slap in the Face.
Governor Should Keep His Promise That He Would Not Hurt
Permanently Injured Workers