Gino DiCaro

Workers' Compensation Crisis Gets High-Level Attention

By Gino DiCaro, VP, Communications

Capitol Update, May 2, 2003 Share this on FacebookTweet thisEmail this to a friend

On May 1, 2003, Governor Gray Davis (D) announced his Workers’ Compensation plans alongside Insurance Commissioner John Garamendi (D) and Senator Richard Alarcon (D-Sun Valley).

"What we have is a 90 year old system that is old, broke down and in need of repair. Not a tune up, but a complete overhaul," exclaimed Governor Davis.

Insurance Commissioner John Garamendi noted that there needs to be immediate action to the work comp problem. "Businesses can't absorb these outrageous costs anymore. If nothing is done, they will be forced to shut down. It's really that simple."

The Governor's package includes SB 228 by Senator Alarcon , which will require the development of a fee schedule for unregulated outpatient surgery centers. Also, SB 354 written by Senator Jackie Speier (D-Hillsborough) would enhance fines for false or fraudulent statements in connection with Workers’ Compensation premiums or costs.

These bills could save California up to $1.6 billion dollars. CMTA is encouraged that the Governor and legislators sense the urgency of the problem. However, CMTA believes that substantially more reform is needed to bring costs down in the workers' compensation system.

Meanwhile, Senate Pro Tem John Burton (D-San Francisco) says significant workers compensation reforms won't happen unless employers are required to offer health insurance to employees as provided in his bill SB 2 (to be heard May 7 in Senate Health). CMTA, the California Chamber and others are opposed to this proposal to add billions of dollars of new costs on employers.

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