More on California Workers Comp Mess

Workers comp in California and elsewhere is such a mess it makes you think that the solution might just lie in making sure workers don't get hurt in the first place....

The San Francisco Chronicle has a good article outlining the basic facts of the California Workers comp crisis which we've written about here before. Basically, in California, direct cash payments to workers are at or below the national average, but California employers pay the nation's highest rates for coverage due to the high number of claims that are filed and higher medical costs in California.

Governor Schwarzenegger (Jeez that's still hard to write -- but so is President Bush) has proposed a reform package that basically screws workers and is threatening to promote and even more drastic referendum if the legislature doesn't act to cut the current program in half.

Fraud is a Fraud

In addition to the main article, there are several interesting sidebars. One is about an insurance fraud investigator, Steven Begley, who spends some time tracking down cheating workers,

But left out of the public debate this year seems to be the cheating ways of their bosses.

Their scams, he said, include "not reporting all the claims they should be claiming, or running a shell corporation: changing the officers of the company on papers to lie and say you've never had experience running a business before. Or misclassifying your employees."

Is fraud a major problem? According to Begley it's a popular fiction:

While the level of fraud can't be judged by the number of cases investigated, that number is far smaller than some imply. In 1999, the most recent year for which statistics are available, 1.6 million workers' compensation claims were filed. Investigators are probing only 989 of those cases.

So, what's at stake?

Not much. Despite reformer rhetoric that plays on the notion of rampant fraud, the Schwarzenegger-backed ballot initiative doesn't call for an increase in the number of state investigators to tame it. Talk swirling around the expected compromise reform bill hasn't centered on fraud containment, either.