Like every other state, Ohio is struggling through our nation's deep economic recession. Our state's leaders are looking for ways to raise revenues without raising taxes. One of the ideas they're studying is a proposal to open Ohio's workers' compensation system to private insurers.
Late last year, the Ohio legislature created the Competitive Workers' Compensation Task Force to study privatization of our state's workers' comp system. Unfortunately, such a scheme would offer a short-term payoff at the expense of long-term costs to Ohio taxpayers and our injured workers.
It's probably not surprising that those pushing the proposal are those who stand to profit most if it becomes law: insurance companies.
Would A Change Make Things Better?
Of course insurance company CEOs want to increase their corporate profits. The real question facing Ohioans is this: would privatization improve our workers' compensation system?
We have already witnessed the partial privatization of workers' compensation. For more than ten years, private Managed Care Organizations (MCOs) have handled the medical component of workers' comp claims. This has not reduced insurance rates, but simply ensured significant profits for the MCOs.
Furthermore, research indicates that broader privatization wouldn't have the intended effect. This is borne out in a study of the Canadian government-operated workers' compensation system and the California workers' comp system in which private insurers compete against one another. Researchers used these systems for their comparison, because the systems are of comparable size.
The study by the independent, nonprofit Institute for Work and Health shows that the Canadian system delivers more care per dollar to injured workers, costing employers and taxpayers less.
The Research Is Conclusive
Institute researchers wrote, "The administrative costs of the workers' compensation system in California, where benefits are provided mainly through private insurers, are much higher than in Canada, where workers' compensation is provided mainly through a single public agency in each province.
"Both workers and employers realize benefits from the public administration of the Canadian system compared with the competitive private insurance market for workers' compensation in the state of California."
Results Don't Match The Rhetoric
Insurance companies have a long history of making extraordinary claims about how they can dramatically lower costs of things such as health care and workers' compensation. The reality is much different, however, as we've all seen in skyrocketing health care costs and declining standards of care across this country.
This isn't the time to bring an insurance company "solution" to a workers' compensation system designed to protect Ohio employees injured in the workplace.
If you have been injured or become ill in the workplace, contact an Ohio workers' compensation attorney to discuss your case and find out how the law protects you.
