Masonry Magazine March 1980 Page. 27
Compensation Today
Compensation today attracts greater utilization through other sources as well. New benefit recovery concepts such as "cumulative trauma" have developed and put great strains on the system. Today's high benefit level makes it attractive to shift many disability claims historically covered under other benefit systems to the workers compensation system.
Administration Problems
The cost explosion in workers compensation also is due in part to the fact many state administrators have lost control over the system. While there has been a revolution in the nature of workers compensation laws in the last eight years, there has been little change in the structure of our administrative agencies.
Little or no attention has been given to the need to assist state administrators in the management of the system. Major effort should be given to assist state industrial commissioners through more effective managerial tools.
Supervision over insurance carriers, doctors and lawyers as well as prompt adjudication of disputes must be looked upon as essential roles for administrators. Presently, too many commissioners have little time or resource to do anything but adjudicate claims. Hence, the system has become overly adversary. The resources for the workers compensation administrators must be increased substantially if they are to perform their functions within the system.
Today many state workers compensation laws are out of balance because the high benefit levels, coupled with serious abuses and over-utilization, have stretched them to the point where cost is a serious factor. Reform
indeed is needed if the system is to continue economically manageable. Yet proposed federal legislation such as S. 420 will require the states to go further in the liberalization of benefits without in any way curtailing the abuses identified. S. 420 would bring the state compensation laws pretty much "in conformity" with the Federal Longshoremen and Harbor Workers Compensation Act.
Longshore Act's Many Problems
That act has been the subject of extensive oversight hearings in the past year and a half before the House Subcommittee on Compensation, Health and Safety. Frankly, in my 10 years in Washington I have never seen a more intensive a comprehensive review of a federal program and its administration. Time does not permit even an outline of the problems uncovered in the course of those hearings with both the law and its administration.
What must be recognized is that the cost of the Longshore Act has reached a critical point. For instance, in the District of Columbia, which is covered by that act, what used to be $100 in insurance premium in 1972 today is $630. And even at those rates insurance companies are shunning the market.
The National Association of Stevedores testified that on average the cost of workers compensation to its members represents about 6% of gross revenues. The American Waterways Operators submitted charts showing workers compensation insurance premiums under the federal act for many of its members exceed 10% of gross revenues.
Yet, in spite of the astromomical insurance rates generated under the
Temporary Total Benefits Have Risen Faster Than CPI and Wages Between 1975 and 1977
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MASONRY/MARCH, 1980 27