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The dysfunction continues

Tuesday, Nov 29, 2016

* Dan Petrella

Members of an Illinois House committee on Monday spent a portion of their hearing on a proposed workers compensation overhaul debating whether the hearing should have been held at all.

Following a meeting earlier this month among Republican Gov. Bruce Rauner and the four top leaders of the General Assembly, the House Labor and Commerce Committee scheduled a hearing on a long-dormant bill from House Minority Leader Jim Durkin, R-Western Springs. […]

But Republicans on the committee, including Rep. Dan Brady, R-Bloomington, said the bill doesn’t reflect progress made last spring in negotiations among a bipartisan group of rank-and-file lawmakers.

“I don’t know what we’re going to accomplish today,” Brady said, noting that Republicans did not ask for the hearing and that Durkin was in a meeting with Rauner and the other legislative leaders at the same time.

* Amanda Vinicky

Democrats persisted anyway, and used the chance to criticize Rauner’s plan as unfair to workers.

But Chicago Rep. Luis Arroyo evidently didn’t get the memo. He seemed to take a page from Republicans’ playbook instead.

“We shouldn’t have this dog and pony show to stand here and talk to everybody all day on something that ain’t going to matter anyway,” he said. “Let’s not play no games. I drove three and a half hours today in the rain, for three and a half hours, thinking that something was going to happen on this bill. And now you guys are telling me that nothing’s happening …. I didn’t come here to waste my time today.”

* Monique Garcia

Republicans balked at the outrage, noting they don’t control the House and can’t schedule hearings. That duty falls to Democrats under long-serving Speaker Michael Madigan.

“We did not schedule this meeting,” said Rep. Dan Brady, R-Bloomington.

And so the dysfunction continued as lawmakers return to Springfield for the final scheduled week of the fall session, with the pressure on to cut a budget deal as a temporary stopgap plan expires at the end of the year.

Democrats also complained that Gov. Rauner was tweeting workers’ comp reform stuff during the hearing even though nobody from his office bothered to show up.

* Matt Dietrich is the only one who got into what was actually discussed once the hearing got underway

Democrats say a 2011 reform bill made workers’ compensation much less expensive for insurers, but those insurers have not passed savings along through lower premiums. But the insurance industry says 332 companies write workers’ comp policies in Illinois, making it the most competitive state in the country. Profits for those companies are 2.68 percent, said Steve Schneider, the American Insurance Association’s vice president for state affairs, Midwest region. “It has not been tremendously profitable,” Schneider told the committee.

Health care providers spoke out against the bill’s proposed 30 percent reduction in several parts of the workers’ compensation medical fee schedule, noting that the 2011 reforms imposed a 30 percent across-the-board cut. “An additional 30 percent would force many medical providers to stop seeing injured workers,” said David Spaccarellie of Deerfield-based Surgical Care Affiliates.

While an enhanced “causation” standard that would require the workplace to be the major cause of an injury is the top goal of Rauner’s workers’ compensation reform plan, Illinois’ current standard is not an outlier. “The causation standard in Indiana is exactly the same as it is in Illinois,” said David Menchetti of the Chicago law firm Cullen Haskins Nicholson Menchetti. Indiana’s insurance rates, rated second lowest in the country in a recent study, are low because employers control medical choices for injured workers and because it pays “poverty level” workers’ compensation benefits, Menchetti said.

- Posted by Rich Miller        

20 Comments
  1. - Hamlet's Ghost - Tuesday, Nov 29, 16 @ 10:18 am:

    Are there any worker’s comp lawyers reading this who can confirm or refute this assertion:

    == “The causation standard in Indiana is exactly the same as it is in Illinois,” said David Menchetti ==


  2. - Peter Burchard - Tuesday, Nov 29, 16 @ 10:29 am:

    Related to public employee piece of this issue, this is the same battle for 30 years. This game is how Madigan uses a combo of work comp, health ins & pensions to secure his power over good local gov employees (and not so good related financial interests) while passing the cost to local governments. This is a form of white collar corruption and how we elect cowards. - from former city mgr, Naperville.


  3. - Anon221 - Tuesday, Nov 29, 16 @ 10:30 am:

    “Indiana’s insurance rates, rated second lowest in the country in a recent study, are low because employers control medical choices for injured workers and because it pays “poverty level” workers’ compensation benefits, Menchetti said.”

    This was near the end of the testimony, and Menchetti and others had to deal with Kay’s obtuse questioning. Kay would not listen to Menchetti’s answers as to case law in regards to causation and the difference between how IN pays for a lose/injury and how Illinois pays. There were specific settled cases stated, but Kay dismissed those rulings. He didn’t want to hear it.


  4. - Lucky Pierre - Tuesday, Nov 29, 16 @ 10:34 am:

    Interesting insight into why Springfield is so dysfunctional. Democrats finally address a huge problem by finally calling a bill from last year the sponsor says does not reflect the current consensus of the bipartisan working groups.

    Democrats feign outrage the sponsor is not there to present the bill even though the Speaker was notified 11 days ago that Leader Durkin does not want the bill voted on.

    Before 2005 reforms Illinois was in the middle of the pack as far as premiums. After 2011 “reforms” we are 8th highest.

    From 2005 to 2010 only one state had a higher increase in premiums.

    After 2011 “reforms” we were one of of only 8 states in 2014 that had an increase in benefits.

    Over 300 companies compete for the Workers Comp business in Illinois, but profit margins are less than 3% vs an average of 7% in other states.

    Democrats believe “greedy insurance companies” are to blame for the problem, not their disastrous 2005 reforms.

    Cue Democrat legislators outrage over working families being sent to the emergency room and welfare if any changes are made to the status quo.


  5. - JS Mill - Tuesday, Nov 29, 16 @ 10:34 am:

    332 insurance carriers know something or they wouldn’t be here. They are not known for their altruism.


  6. - wordslinger - Tuesday, Nov 29, 16 @ 11:16 am:

    –But the insurance industry says 332 companies write workers’ comp policies in Illinois, making it the most competitive state in the country. Profits for those companies are 2.68 percent, said Steve Schneider, the American Insurance Association’s vice president for state affairs, Midwest region. “It has not been tremendously profitable,” Schneider told the committee.–

    OK, how does any of this gibe with the discussion in Springfield?

    Profits are so bad in Illinois that 332 companies are lining up to write policies, making it the most competitive state in the union?

    Causality and payouts in Illinois are so out of line that more insurance companies flock to Illinois to write policies than any other state in the union?

    If the workers’ comp system is so out of line here, why are insurance companies falling all over each other to do business here?

    Nobody can make them do business here. But more insurance companies are writing work comp policies here than any other state — because it’s so bad?

    I call b-s.


  7. - flea - Tuesday, Nov 29, 16 @ 11:31 am:

    too bad Arroyo had to drive 3 1/2hours for the show. Lot’s more needier have been waiting a lot longer, sorry for your inconvenience. PFFF


  8. - chiatty - Tuesday, Nov 29, 16 @ 11:46 am:

    As usual, wordslinger nails it.


  9. - Louis G. Atsaves - Tuesday, Nov 29, 16 @ 12:06 pm:

    @Hamlet’s Ghost: Yes. The causation standard in Indiana is the same as in Illinois right now.


  10. - wordslinger - Tuesday, Nov 29, 16 @ 12:28 pm:

    –Over 300 companies compete for the Workers Comp business in Illinois, but profit margins are less than 3% vs an average of 7% in other states.–

    LOL, so more competition is a bad thing? For whom?

    But, shockingly, you’ve included some numbers. Care to back them up?

    Because the insurance industry disagrees with you.

    In your always-curious economic theories on economics, why would more insurance companies flock to Illinois than any other state to make less money?

    http://www.insurancejournal.com/news/national/2016/07/18/420302.htm


  11. - Chicago 20 - Tuesday, Nov 29, 16 @ 12:37 pm:

    “North Dakota consistently has the lowest workers’ compensation rates in the country, Haas wrote, and has returned premium dividends to employers totaling $774 million from 2005 through last year, making the effective premium rate for many employers lower.

    Those lowest-in-the nation premiums contribute to a lax workplace safety environment resulting in North Dakota’s highest-in-the-nation occupational death rate, Haas argues”.

    North Dakota has the cheapest workers comp rates, for a little more corporate profits in exchange for more workers killed on the job.

    Is this what Illinois businesses and legislators really want?

    http://www.inforum.com/content/lawyer-accuses-nd-wsi-failing-injured-workers


  12. - Rich Miller - Tuesday, Nov 29, 16 @ 12:42 pm:

    ===Is this what Illinois businesses and legislators really want?===

    Taking an argument to an extreme like that isn’t helpful.


  13. - Chicago 20 - Tuesday, Nov 29, 16 @ 12:44 pm:

    It’s the grim reality in North Dakota.


  14. - Rich Miller - Tuesday, Nov 29, 16 @ 12:46 pm:

    ===in North Dakota===

    And this is Illinois, where we have the opposite problem as far as costs go.


  15. - Lucky Pierre - Tuesday, Nov 29, 16 @ 12:47 pm:

    Who said competition is a bad thing? Not me.

    The law of supply and demand dicates that competition lowers prices, not raise them.

    Every wonder why rates are rising, not falling? Surely one of those 300 companies could make a bundle by lowering their rates but they have not.

    Could it be the rates are fair, given the exposure?

    The less than 3 percent profit margin for Illinois workers comp insurers was quoted in the hearing yesterday and not disputed by any legislator or expert that testified.

    Only you (surprise) are disputing it.


  16. - Chicago 20 - Tuesday, Nov 29, 16 @ 12:50 pm:

    Do you believe reducing business premiums and injured worker benefits will result in safer workplaces and leave the injured worker financially independent and self-sufficient?


  17. - Anon221 - Tuesday, Nov 29, 16 @ 12:57 pm:

    Say we go on to the race to the bottom, and cut benefits to injured workers that have claims based on just causation. As the medical community testified yesterday, cutting benefits cuts into medical services, and can easily lead to more workers facing shorter working careers AND the possibility of permanent disability. The softball and fishing dog whistles need to stop. Take a good look at what could be lost if we “compete” with Indiana or any other state that values workers less. Do you want good, safe workplaces in Illinois provided by conscientious employers who understand that safe workplaces are part of a profitable business? Or, do you want employees to have to take what is offered, even if it’s not safe just so they have a job regardless of the risks? Causation is not only on the employee’s shoulders. Causation can be part and parcel of how a business is run and managed. Do we value Illinois workers, or simply put a price on them because they can be replaced.


  18. - Lucky Pierre - Tuesday, Nov 29, 16 @ 1:20 pm:

    No one repeat no one in yesterday’s hearing was advocating for a race to the bottom, just a return to the middle where we were before the 2005 reforms.

    I don’t recall huge numbers of injured workers on welfare or in the emergency room then.


  19. - Chicago 20 - Tuesday, Nov 29, 16 @ 1:38 pm:

    In the middle of the averages of 2005?

    Or the averages of 2011?

    Or the averages of 2016?

    Benefits are dropping faster than the rates and the carnage is piling up.

    North Dakota is not an anomaly, ALEC is complicit.


  20. - thechampaignlife - Tuesday, Nov 29, 16 @ 3:44 pm:

    What would be the impact of adopting Medicare rates? Would that increase or decrease costs?


Sorry, comments for this post are now closed.


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