Illinois Republicans have criticized Democrats for proposing tax reform plans before undertaking "fundamental economic reforms." This includes changes to the state's workers' compensation system. Why are they ignoring the major reform bill the General Assembly passed five years ago?
For months now, Illinois Republicans have criticized Democrats for proposing tax reform plans before undertaking "fundamental economic reforms," like forcing Medicaid beneficiaries into a private managed care system and cutting (already-reasonable) public employee pension benefit. This year, they've added workers' compensation reform to their list of demands.
In November, Senate Minority Leader Christine Radogno (R-Lemont) urged Rep. Lou Lang's (D-Chicago) jobs task force to prioritize the issue. This past week, Radogno and House Minority Leader Tom Cross (R-Osewego) wrote a letter to Gov. Pat Quinn with suggestions for improving the state's economic climate. Their first suggestion for lowering the cost of business in the state? "Reform our workers compensation system to equalize our costs with the costs of other states."
Apparently, Cross and Radogno have short memories.
Back in 2005, the General Assembly passed HB 2137, the first major reform of the state's workers' comp laws in two decades. The agreement was crafted and endorsed by leaders from both organized labor and the business community and passed virtually unanimously in both chambers. It modernized and boosted benefits for injured workers, increasing the minimum rates for temporary total disability and permanent partial disability to correspond with the state's minimum wage. In the most dire cases, one in which a worker is killed on duty, the minimum benefit was raised from $400,000 for 20 years of payments to the greater of $500,000 or 25 years of payments.
Businesses benefited from the implementation of a medical fee schedule for job injuries (tied to the consumer price index) that experts predicted would save Illinois companies millions of dollars annually. The law also established an investigation unit housed within the Illinois Department of Financial and Professional Regulation to investigate charges of workers' compensation fraud. "Illinois manufacturers and other businesses will be able to realize significant cost savings through nationally accepted managed care practices," Illinois Manufacturers’ Association President & CEO Gregory Baise said at the time, "and everyone will benefit from the pragmatic anti-fraud measures included in these reforms." "This is clearly the most comprehensive workers' compensation reform in a generation." added Illinois Workers’ Compensation Commission Chairman Dennis Ruth. "This is a win-win for both employers and employees of the state." Cross himself highlights his support for "landmark workers’ compensation reforms" on his own website.
Since most of the provisions of the bill only went into effect in 2006, experts are still determining how the changes have affected the overall cost of the system. But the limited research available is very encouraging. In 2008, Attorney General Lisa Madigan and various county state’s attorneys secured convictions against seven individuals charged with felony workers’ compensation fraud, according to a 2009 annual report (PDF) from the Workers’ Compensation Fraud Unit.
Medical costs are dropping, as well. A new report (PDF) produced by the Illinois Workers' Compensation Commission found that in just four years, the fee schedule has produced 5 percent savings compared to medical inflation. In 2009, nominal fees actually decreased 1.48 percent. "The fee schedule appears to be responsible for positive trends in medical costs that are expected to continue," the report states, "without harming workers’ access to medical care."
With any large piece of legislation, there is always room for improvement. Two years ago, funding for the fraud unit was sliced from $900,000 to $500,000, which Sen. Dale Righter (R-Matoon) argues (PDF) has limited the ability of the insurance department to prosecute cases. But that's a minor complaint about a bill that looks to be doing exactly what it was intended to do.
Nonetheless, the Republicans now argue that further reforms will help alleviate the state fiscal crisis. Like the "managed care" myth, this talking point obscures successful efforts the General Assembly has taken in recent years to address a legitimate problem in Illinois.
When GOP leaders cite workers' comp reform as crucial to the health of the state's economy, reporters should force them to explain in greater depth the purported shortcomings of the 2005 bill they supported.