Worker's Compensation insurance was created during the Industrial Age as a contract between employers and employees. This contract said that employees could not sue their employer in the event they were injured in exchange for payment of their medical bills and enough wages to live on until the employee recovered.
Over the years, states have reformed their Worker's Compensation systems to lower the costs for businesses so they may attract new businesses and keep current businesses within the state. These cut backs and increased requirements for benefits are leading many seriously injured employees into poverty.
The changed system makes getting everyday prescriptions, basic help recommended by doctor's, and surgeries take much longer than necessary to be approved for employees.
The reform in the worker's compensation systems have been pushed by big businesses and insurance companies that say costs are out of control. After much research, ProPublica found that this was a false premise used to make reform happen. In reality, companies are paying the lowest rates for Worker's Compensation insurance since the 1970's and in 2013, insurers had the most profitable year in over a decade.
With these insurance companies cutting benefits for injured workers and becoming more profitable, who is paying the bills for those employees with serious injuries?
The answer: The TAXPAYERS.
When an injured worker cannot work and is living off reduced wages, many workers must find a way to supplement their healthcare as well as their basic necessities like food and housing. These workers are forced to file for Social Security Disability, Medicare and Medicaid, and food stamps.
In some states, Worker's Compensation will only provide for workers for a certain amount of time even if they have not fully recovered.
ProPublica and NPR took note of insurance industry data, confidential medical and court records, as well as state laws to see where states stood in regards to their Worker's Compensation system.
In 33 states, they found that they had passed laws reducing benefits for injured workers and making it much more difficult for people with certain diseases and injuries to qualify. They also found that where a worker is injured matters in how much they will receive for a specific injury. States have individual systems. An example provided by NPR was the loss of an eye. If a worker lost their eye in Alabama, they would only receive $27,280 for the injury. In Pennsylvannia, they would receive $261,525.
There are also an increasing amount of employers and insurers that control medical decisions. In 37 states, workers are not able to choose their own doctor and are limited to a list provided to them. In California, insurers are allowed to reopen cases and deny medical care based on a doctor's opinion that has never seen the patient nor is licensed in that state.
The extent to which taxpayers are footing the bill has not been nationalized because the federal government does not monitor state Worker's Compensation laws according to the article written by NPR. They say that legislatures have defended their cuts to keep and grow businesses in the state.
The Federal government did create 19 mandates for Worker's Compensation, however, states are not following them all today. These mandates were set under President Nixon and set basic standards for the system. The mandates included that nearly every employee would be covered, employees could pick their own doctors, and for those unable to work, would receive up to "two-thirds of their wages up to at least the state's average wage."
The mandates also stated that employees be compensated as long as they were disabled and with no arbitrary limits and that spouses receive death benefits unless they remarry or children that receive benefits continue to do so until they graduate from college.
In Oklahoma, the government cut wages for injured workers as an act of "tough love." They felt it would incentivize workers to get back to work. For a lot of workers, these cuts forced them to go on government assistance to continue to pay for housing and food.
Insurance companies and Worker's Compensation say fraud is a major reason for the increased requirements for benefits and reducing benefits as a whole. ProPublica found that most money that was lost was from employer fraud and not injury fraud. Some employers misclassify employees and underreport payroll to get cheaper rates.
As Worker's Compensation insurers continue to cut benefits for seriously injured workers, more will turn to government assistant. That means taxpayer's will be paying for what should be covered by the Worker's Compensation Insurance.
Before we decide to "reform" worker's compensation, long term affects need to be recognized. By reducing benefits in an attempt to save money for businesses and insurance companies, the aggregate effect sees dependance on Social Security Disability, Medicare, Medicaid, and food stamps. Again, leaving the taxpayers to pay for benefits that should already be covered through an injured worker's employer.
Have You Been Injured On The Job?
If you've been hurt at your job you can speak with a workers' compensation lawyer. Please contact us online or call our Charleston, South Carolina office directly at 843.488.2359 to schedule your consultation. We are also able to meet clients at our Conway, Myrtle Beach, Murrells Inlet, Mt. Pleasant, North Myrtle Beach or North Charleston office locations.