Fact or Fiction: IL Policy Institute Reports Potential WC Costs to Taxpayers at $1B

Springfield, IL (WorkersCompensation.com) - Policy analysts in the Prairie State calculate taxpayers will bear $1 billion due to workers' compensation costs.    

The Illinois Policy Institute delivered a special report authored by Michael Lucci, vice president of policy, and Mindy Ruckman, policy analyst, detailing rising workers' compensation to the tune of $1 billion. "The report stands for itself," Lucci said, noting the estimate does not include costs for first responders since request for the figures by the institute were denied.

Though officials willingly released figures for Chicago's 12,000 public employees, "they will not give" the numbers for the 20,000 first responders covered by workers’ compensation. "We are going to file a Freedom of Information Act (FOIA) request," he said. As for the figures they did retain, they are "stunning" according to Lucci, who said presently 2,000 open claims total one out of six Chicago employees filing for injury.

It comes down to politics, according to the Institute. "There are very notable leaders, especially Speaker of the House Michael Madigan, who has repeatedly objected [high cost claims] saying workers’ compensation is not a budget issue," Lucci said.

Steve Brown, spokesperson for Madigan, said the "significant changes" in the 2011 reforms are most often ignored by the Institute. As for the billion dollars, there is "no way to verify" that estimate, according to Brown. Calling the Institute, "a shaky dark money lobby group," Brown said he does not trust the report at all.

"The most import thing to note is that some of their recommendations would further damage middle class families and injured workers ability to recover and probably make health services less available than they already,” he said, adding all of which brought down cost.

While waiting for big city Chicago figures to come in on first responders cost to workers’ comp, Lucci said smaller regions like Quincy and Waukegan also suffer unreasonable costs. In a 2015 Chicago Tribune report, Mayor Wayne Motley called industry costs an "epidemic," since paying out up to $905,000 that year for six settlement claims. 

"We're seeing more and more claims by our police officers and firefighters, and it's really impacting our budget every year," Motley said. The Chicago Tribune further reported in November 2016 that under Madigan "at least six bills stuck in committees they  control would lower workers' comp insurance costs for companies," and "the legislation has been idling for almost two years."

According to 37-year-practicing attorney Eugene Keefe, workers' compensation and budget matters go beyond Madigan to Gov. Bruce Brauner. "All he has to do is call a meeting, he doesn't even have to go to, he could just send someone from his office, to make it [workers' comp costs] lower," Keefe said, out of his Chicago office. 

The attorney said the governor controls the jobs of up to 30 Illinois arbitrators and to some extent nine commissioners, whose very positions overtax the already burdened system. "The governor does not know the power he has," he said.

Representing major corporations including Nestle, Target and Coca Cola, Keefe said while he respects the Institute Policy and Lucci, he is unsure how effective the report and push for reform will be. "Maybe it will come down, maybe it won’t, but it will take two or three years to show savings," he said.

However, that is not stopping the institute from further research and reform. Lucci said the present system "prioritizes the short term profits" for special interest groups, parts of the medical community, the trial bar and certain Illinois labor unions. "There are a lot of things that are surprisingly absurd about the Illinois system," said Lucci, pointing out that there are "large financial incentives for doctors to do things that are bad for the worker."

"I would not say all doctors do, but substantial research to show that many do in the workers’ compensation system," he said. The policy analyst noted the state's medical fee rate schedule is "completely out of line," with some shoulder surgeries that have up to a 300 percent higher premiums than Medicaid. "If you tie into Medicare and all the prices are normal and relative, the doctor will not have the financial incentive to do one thing over the other," he said.

Add in the fact that Illinois permits doctors to prescribe and directly sell injured workers opiates, and it makes matters worse, according to Lucci, who said when national research on the present doctor-prescribed oxycodone epidemic is discussed, "they point out Illinois and say this is where it is worst."

Brown said the final leg of the Madigan's efforts to reform workers’ compensation is to work "with insurance companies who are not passing the medical savings along to the employer. "That is where we are focusing our attention," he said. 

And if, just if, the policy's number of $1billion is close what taxpayers will bear, Brown said, "when you look at in the overall picture of payroll cost, even if you can get to billion dollars its not that much in terms of a state as big as Illinois."

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