|The average workers’ compensation insurance premium rate in Illinois for long-distance trucking is more than $14 per $100 of payroll. That’s nearly 50 percent higher than the average rate among Midwestern and surrounding states. And it’s more than double the rate employers pay in Indiana.
There are many commonsense reforms that lawmakers should pursue to fix this overpriced system, giving millions of Illinoisans the benefits of strong blue-collar jobs growth while protecting worker safety.
The 4 main workers’ compensation cost drivers that must be reformed
Workers’ compensation costs are much higher in Illinois than in other states. But why?
Trial lawyers in Illinois say it’s due to profiteering by insurance companies. But that math doesn’t add up. For years, insurers in Illinois have had a lower profit rate than the national average.
The real problem with the system is that the interests of workers and businesses take a back seat to those of trial lawyers and doctors who profit off the system.
Here are four major cost drivers that make workers’ compensation so expensive in Illinois:
No. 1: The system is a cash cow for trial lawyers
Illinois’ wage replacement rates, which govern the size of settlements, are some of the highest in the nation. Lawyers profit both from the size of those settlements and the generous formula that calculates their share of the prize.
No. 2: Medical benefits are way too expensive
Most states tie their medical fees under workers’ compensation to Medicare. But in Illinois, special interests set prices. As a result, major surgery in Illinois is three times more expensive than the same surgeries under Medicare. Pain management injections are twice as expensive. This is way out of line with other states.
No. 3: Doctors have a financial incentive to overprescribe dangerous drugs
Illinois allows doctors to not only prescribe painkillers out of their offices, but to sell them directly to injured workers at big markups. When doctors are allowed to do this, they prescribe three times as many opioids as they would otherwise. And workers are off the job for 85 percent longer. This drives up the cost of workers’ compensation insurance. It’s also a major worker health issue.
No. 4: Many workers have a financial incentive to stay off work
There are some workers’ compensation cases in which Illinois workers can make more money off the job than on the job. That gives a strong incentive to play up an injury in the first place, and then extend it as long as possible.
If Illinois wants more manufacturing jobs, state lawmakers need to address these cost drivers. Tweaks around the edges won’t cut it anymore, much less claiming the 2011 reforms were enough and doing nothing at all.
Illinois’ weak manufacturing recovery means fewer opportunities for Illinoisans to earn a decent wage for hard work, while new and better opportunities are emerging just beyond Illinois’ borders.
But it doesn’t have to be this way. Illinoisans deserve a shot at the middle class. They deserve strong blue-collar industries. And they deserve fairness in their workers’ compensation system.