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It's time to privatize workers' comp in Washington State

by John Stephenson / /

Taxes and bonding are not the only fiscal policy issue thatWashington voters will decide on Tuesday, November 2nd. WithInitiative 1082, Washingtonians will havean opportunity to end the state’s costly monopoly on workers’ compensationinsurance.

 

As we stated in our 2010 Ballot Guide: The Taxpayers Perspective, Initiative 1082 would allow privatize the workers compinsurance market in Washington by allowing private insurers to compete to sellthe insurance products that provide medical benefits and wages to employees whoare injured on the job. Some larger businesses in Washington are able toself-insure. But others must buy their workers comp insurance from the state’sDepartment of Labor and Industries because Washington is one of four statesnationwide with a monopoly on workers’ comp.

 

The cost of a government monopoly for workers’ comp comparedto a private market is striking. In Washington, a worker with a time loss claimmisses an average 270 days of work. But in the neighboring state of Oregon,which relies on privately-provided workers’ comp, that same worker misses anaverage of only 70 days of work. Moreover, Washington has the nation’s highestrate of lifetime pension awards for permanently disabled workers.

 

Despite a decline in the numbers of claims, insurance taxeshave climbed 53% over the last decade. Meanwhile, Oregon hasn’t increased itspremiums for almost two decades. Washington increased premiums eight percentlast year, yet Washington’s auditor reports that the state’s accident fund willlikely become insolvent in two years and requires another larger premiumincrease to remain viable.

 

While the legislature has dithered, businesses have moved toprivatize and save the workers’ comp market in Washington by getting Initiative1082 on the ballot. Special interests, including organized labor and triallawyers, have predictably lined up against the measure, claiming that privateindustry cannot be trusted. But has the government done any better? The factsdo not suggest it. Fortunately, voters will have the final say on Tuesday.