Next week Democrats intend to pass a bill that upsets the careful balance in workers’ compensation struck over the past 96 years. The bill reverses the current system that allows an employer to choose care for injured workers, and instead places the choice of doctor in the employee’s hands. This will destroy an employer’s opportunity to contract for health care and thus will raise insurance premiums greatly. This move will wipe out Iowa’s optimal position as a high benefit low insurance premium state.
The bill, HF 530, provides that an employee may select their own doctor by having that doctor on file with the employer. The doctor need not be a specialist or occupational physician, and any referral to such a specialist must be paid for by the employer. Currently employers can send injured workers directly to the appropriate specialist thus avoiding the cost of the referring doctor. Under the bill, the added step of referrals and the inability of employers to contract for health care will drive up the cost of care and thus raise workers’ compensation insurance rates.
This bill attempts to “fix” a system that is not broken. Employees already have a procedure to request a change of doctor and in the overwhelming majority of cases such requests are granted. However most workers never feel the need to request alternative care. Less than two percent of those treated for work related injuries ever request alternative medical care.
Iowa workers already enjoy the highest maximum benefits of any state in the Midwest. Iowa’s rate of $1,206 per week outstrips the next highest performer, Minnesota, by $456 per week, and is far ahead of Nebraska, Illinois, South Dakota, Kansas, Missouri, and Wisconsin. In fact, Iowa is ranked third nationally, behind only the District of Columbia and New Hampshire.
Despite these high rates Iowa still enjoys very low workers’ compensation insurance rates. Iowa ranked 41st highest in total premiums in the 2008 edition of Oregon Workers’ Compensation Premium Rate Rankings. The impact of HF 530 could be staggering to Iowa’s rates. In 2007, the National Council on Compensation Insurance (NCCI), the national manager on insurance data, estimated that the elimination of employer directed care in Iowa would increase premiums by up to $93 million per year. This doesn’t even include the impact on self-insured employers or state and local government.
Independent research into this subject has revealed that employees choose a provider based on familiarity rather than expertise. The result, according to the independent research group Workers Compensation Research Institute (WCRI), is an increase in medical payments, higher indemnity benefits, lower odds of returning to work, and increased time out of work.
In light of these facts, one must question what the goal of this legislation is. Increased costs and decreased service cannot possibly be beneficial to Iowa workers. Not to mention the severe blow to Iowa’s already bad business climate.