Insurance Industry Considers California Worker's Comp Rate Increase

Share |
(Sacramento, CA)
Monday, June 8, 2009

Worker’s Comp insurance rates in California could increase by more than 23-percent next month.   The insurance industry says it needs the hike to cope with rising health care costs while opponents fear it would put some companies out of business. 

Capital Public Radio's Steve Shadley reports...

A state panel is considering a change to the guidelines insurance companies use to determine worker’s comp rates.   The coverage protects employers if their workers are hurt on the job. 
Mark Webb is an executive with “Employers Direct” one of the insurance firms considering a rate increase... 
“We’re seeing an increase in the utilization and need for more services.  Hospital costs are increasing.  Pharmacy costs are increasing.  So we feel that as a bottom line cost measurement that this increase needs to occur...”
The Consumer Federation of California’s Richard Holober  opposes the rate increase.  He says the hike is too high... 

"The proposed, outrageous increase of 23-percent in California premium rates is bad for workers, its bad for California business.  And, it’s going to result in higher California unemployment...”
State Insurance Commissioner Steve Poizner does not have the authority to change worker’s comp rates.  He’ll make a recommendation on the rates they can charge by the end of the month. Then its up to the insurance companies to decide if they’ll follow his advice.