I-1082: Bad for Business, Bad for Workers, Bad for You

I recently posted information about I-1082 on the Tukwila Talk community blog and thought that I would share those same thoughts here for those who are wondering about this important initiative as ballots are being filled out and mailed in.

1. I-1082 is bad for workers – In I-1082 the insurers have designed a system in which they would never be required to make a decision on a claim for medical benefits, nor would they be required to notify injured workers, their employers or their doctors should the claim be denied. There is no accountability. You have to understand that this is a principal foundation of the insurance industry profit model: delaying and denying legitimate claims. Washington State Insurance Commissioner Mike Kreidler has come out against I-1082 because he says it gives workers’ compensation insurers special exemptions that no other line of insurance is allowed; it leaves no way to hold them accountable (Sec. 3)

a. Under I-1082, companies and insurers can require workers to go to their doctors (who they tend to cherry pick as doctors who will again delay and deny treatment); under the current system, workers can pick their own healthcare providers.

2. I-1082 is bad for small business – Under I-1082 insurance companies will be able to cherry-pick large and less risky companies, then jack up the rates for small businesses and leave them nowhere to turn. Even one of I-1082’s biggest supporters admits, “This will increase costs for some employers,” raising premiums by as much as 18% for the average business owners starting this year. I-1082’s industry backers put the initial costs at $315 million for Washington’s small businesses.

3. I-1082 is bad for taxpayers – Whenever an Initiative is proposed, its impact must be studied by the Office of Financial Management. According to the Office of Financial Management, I-1082 will likely cost state taxpayers an estimated $200 million over the next five years, and local governments an additional $47 million in the same time span, which no one can afford in this tough economy.

4. Our current L&I system is very EFFICIENT Insurance companies historically didn’t make profits off of premiums charged and claims paid, rather, made a profit from investing those premiums and trying to make money off of the investments until money needed to be paid out on claims (note: this has changed in the last ten years or so and insurers are now, as a business model, trying to make a profit by delaying, denying and undercutting legitimate claims). Our 100-year-old L&I system in Washington is very efficient. It is non-profit, meaning the government isn’t making a profit on the system – unlike private insurers’ intentions under I-1082 – and due to the investments made by L&I coupled with the efficiencies of the single-payer system (similar to Medicare) – for every $1.00 paid into the system in premiums, $1.25 can be paid out in claims to injured workers. The proposed private multi-payer system (really? has that worked out so great with healthcare?) would only pay out $.40-$.60 in claims for every $1.00 collected in premiums.

5. I-1082 is risky for you – Another important tidbit about I-1082 gives me great pause. Workers Comp insurers, under I-1082, would be exempt from the State Guarantee Fund. This is the fund that pays out claims if the insurance company goes into receivership or liquidation (essentially bankruptcy for insurers). This is not unheard of – Reliance went into receivership and liquidation in the recent past -and AIG (ONE OF THE BIGGEST PROPONENTS OF I-1082) probably would have gone bankrupt without the government bailout. What this means is that if your employer buys workers comp insurance from an insurer who later goes bankrupt, you’re out in the cold. You cannot apply to the Guarantee Fund for compensation. Zip, Zilch, Nada. Now, imagine that you’re catastrophically disabled on the job and the insurer goes bankrupt 5 years from now and can no longer pay your medical or wage loss compensation. Where are you going to turn?

I’m happy to answer any additional questions about this important initiative, which must be defeated for the security of all except those invested in insurance company stocks.

Roxanne Eberle
Attorney at Law
Wild Sky Law Group, PLLC
800 Bellevue Way NE, Suite 400
Bellevue, WA 98004-4273
Phone: 425-646-2773
Fax: 1-888-646-5608

Vote No on I-1082, “sour milk for the state’s workforce”http://www.seattlepi.com/opinion/426452_initiative1082.html
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