Day 41: Allow Private Competition for Workers' Comp
Posted by Brett Davis - March 21, 2009With a gap of about $8 billion between revenue and what the state wants to spend in the next two years, legislators are scrambling for money-saving solutions. Assuming the legislature is serious about dealing with the state’s growing budget problem, the government should allow private companies to compete with the Department of Labor & Industries (L&I). Under state law, all employers must purchase coverage from L&I or assume liability for themselves. Either way, L&I has oversight over all workers’ compensation claims. It turns out Washington is just one of four states with workers’ compensation monopolies.
As noted in a recent column in The News Tribune by members of the Building Industry Association of Washington, Oregon has a private workers’ compensation insurance market. The results are impressive: nearly two decades without a rate increase for Oregon employers and three straight years of most employers paying nearly 6 percent less for workers’ compensation coverage. Meanwhile workers’ compensation rates in Washington state are increasing, including this year. L&I adopted an average rate increase of 3 percent for 2009.
As noted in a recent column in The News Tribune by members of the Building Industry Association of Washington, Oregon has a private workers’ compensation insurance market. The results are impressive: nearly two decades without a rate increase for Oregon employers and three straight years of most employers paying nearly 6 percent less for workers’ compensation coverage. Meanwhile workers’ compensation rates in Washington state are increasing, including this year. L&I adopted an average rate increase of 3 percent for 2009.
Our neighbor to the south clearly demonstrates that it’s possible for private industry to do a better job than government when it comes to providing a system of financial support to sick and injured workers. The state should legalize private insurance, which would bring choice, quality service and price competition to the system, benefitting both employers and workers.
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