Workers' Insurance Costs Reach Decade High

SACRAMENTO — Across the country, the cost of workers' compensation insurance is soaring at the highest rate in nearly a decade, adding another heavy burden to the lagging shoulders of businesses and the struggling national economy.

The governors of Florida, West Virginia and Washington have called special sessions of their legislatures this year to find ways to contain costs. Elsewhere, thousands of bills on workers' compensation have been introduced.

The system covers 127 million workers nationally but is regulated state by state, with no federal oversight. Unlike with Medicare and Medicaid, Congress has no role in the regulation of workers' compensation.

Nationwide, the average cost of workers' compensation insurance has risen 50 percent in the last three years, according to Robert P. Hartwig, the chief economist at the Insurance Information Institute, a trade group in New York

But nowhere in the country have prices been rising faster and with more debilitating impact than in California. The average cost of workers' compensation insurance here has nearly doubled over the past three years, said David Bellusci, the chief actuary of the Workers' Compensation Insurance Rating Bureau in San Francisco, another insurer-backed organization.

Prices are escalating, government and industry officials said, because of rising medical and legal costs, a recent devastating price war by insurers and a significant amount of fraud.

Source: New York Times