Dem Rollback of Workers' Comp Reforms Threatens Premium Death Spiral
Augusta, ME (WorkersCompensation.com) - Senator Troy Jackson (D-Aroostook) yesterday presented LD 443, a concept draft bill that would roll back important, bipartisan reforms made to the workers' compensation insurance system in 1992 and 2012. House Republican Leader Ken Fredette (R-Newport) issued the following statement in response:
"We went from having two dozen workers' comp insurers in Maine in the late 1980s to three in 1992, with two of them filing papers to leave and the third threatening to do the same just before Gov. McKernan's reform came about. That year, nine of the state's largest employers left the state, taking 739 jobs with them. We had a situation where everyone was required to buy insurance but nobody wanted to sell it. Business costs skyrocketed and were passed on to Maine workers. The Democrats are now trying to roll back the reform that cleaned up the mess we had in 1992 and drove workers' comp costs down almost 50 percent since then. I don't see how their plan would accomplish what we're trying to do for job growth in the state of Maine."
The proposal would require that insurers cover more workers for lesser injuries than what is covered currently. For example, permanent, unlimited benefits would be available to those with 10 percent impairment, compared to the current 18 percent. The partial impairment eligibility test would be loosened to pre-1992 levels. In short, the rollback would make it easier for people to get on workers' comp and provide an incentive for many not to work at all.
Rep. Amy Volk (R-Scarborough), House Republican Lead on the Labor, Commerce, Research, and Economic Development (LCRED) Committee added the following:
"Basically what we heard today from the state's Workers' Compensation Board and from national actuaries was that if we implement the Democrats' rollback, we'll see skyrocketing premiums and insurers leaving the state en masse. It would be a major blow to our economy in one of the segments that's actually been seeing improvement. This is one of the areas of the economy that we actually have a lot of control over, and a rollback like this can do a lot of damage."
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