Schwarzenegger’s Work Comp Legacy: Record High Insurance Company Profits, Record Low Injured Worker Care and Compensation

SACRAMENTO, CA – The California Applicants’ Attorneys Association (CAAA), whose members represent Californians injured on the job, today released its analysis of six years of experience under Governor Schwarzenegger’s SB 899, saying the law “has failed Californians injured on the job,” in the words of CAAA President, Barry Hinden. “Gov. Schwarzenegger has called his workers’ compensation law a great ‘success.’ We ask, ‘Success for whom?’ SB 899 has been extremely profitable for insurance companies, but a colossal failure for those injured on the job.”

“Most of the insurance premium dollars that employers have paid have gone to insurance company profits and expenses, not to care for on-the-job injuries nor to compensate permanently disabled workers,” said Hinden. “Injured workers have seen their disability compensation plummet to near the bottom of the 50 states. Medical care has been delayed and denied to the point that many physicians will no longer treat injured workers. This is contrary to what was promised, and the governor has refused to remedy this horrible situation for Californians who are injured while working.”

Gov. Schwarzenegger has harmed injured workers by:

  • Cutting permanent disability compensation by up to 70%;
  • Reducing access to medical treatment;
  • Taking away injured workers’ choice of doctor;
  • Allowing insurance carriers to pocket billions from denying medical care;
  • Cutting off temporary disability to the most severely injured workers; and,
  • Reducing disability compensation to minorities, women and seniors through discriminatory “apportionment”

CAAA news release: Schwarzenegger’s Work Comp Legacy, Dec. 2, 2010; page 2 “Gov. Schwarzenegger’s law continues to harm Californians injured on the job,” said Hinden. “The administration has put insurance companies ahead of disabled workers. While insurance carriers racked up record profits, injured workers have set new records for bankruptcy, home foreclosure and suicide. Injured workers have been waiting for years for the governor’s promised revision of compensation for permanent disabilities, but now the governor says he isn’t going to make any changes.”

“Gov. Schwarzenegger put a cap on temporary disability compensation, limited physical therapy to 24 lifetime treatments and has handcuffed the workers’ compensation Judges by taking away their power to order additional benefits when they deem it appropriate,” said Hinden.

Permanent disability compensation has been drastically cut Multiple independent studies, including studies conducted by the California Commission on Health, Safety and Workers Compensation (CHSWC), and the Administration itself, have documented fifty to seventy percent cuts in compensation for permanent disabilities.

Insurance carrier profits skyrocketed under Schwarzenegger’s law “Since 2004, when SB 899 was enacted, the largest portion of employers’ premiums has gone to insurers’ profits and expenses, not to injured workers’ care or compensation for their permanent disabilities. Less than half of the premium collected from employers since 2004 has gone to provide care and compensation for injured workers, while insurance companies have recorded record high profit levels and pocketed more than $26 billion in profits,” said Hinden.

Medical care and disability compensation continue to fall under SB 899 Hinden said a recent filing by the insurance industry to raise rates was totally unjustified, noting that the Insurance Commissioner rejected the entire requested increase. “The insurance industry would like us to believe that their costs are going up, “ Hinden said. “But, in fact, workers injured on the job are still feeling the pain of the horrendous cutbacks in medical care and compensation.” He added that the industry’s own rating bureau projects that the cost of medical care and disability compensation for workers injured in 2009 was 10% lower than 2008, and 12% lower than 2004.