Wednesday, November 26th, 2014

Scott-O-Meter

Lower workers' compensation costs by 35 percent

Will make "a 35 percent reduction in workers' compensation costs."


Updates

Scott fails to lowers workers comp by promised amount

As part of his plan to grow jobs, Gov. Rick Scott promised "a 35 percent reduction in workers' compensation costs."

By the time Scott took office in 2011, Florida already had taken steps to cause its rates to nosedive, as a result of a reform package signed by Gov. Jeb Bush in 2003.

After Scott's first year in office we noted that rates increased an average of 8.9 percent, so we rated his promise Stalled. We decided to check on his progress as he heads into his fourth year.

The Office of Insurance Regulation also approved rate increases of 6.1 percent in November 2012 and .7 percent in October 2013, according to a report from the Florida Office of Insurance Regulation. The most recent rate increase still places rates 56 percent lower than before the 2003 reform.

In 2010, Florida was in 40th place in terms of rates. Based on the Jan. 1, 2012, rates, Florida has rise, to 29th place -- still below the national median rate.

We sent a summary of our findings to spokespersons for Scott and asked if he had taken any steps to lower workers comp by 35 percent.

A Scott spokesman pointed to a law Scott signed in June, House Bill 662, which revised provisions related to medications dispensed as it related to workers' comp. Legislative staff analysis of the bill stated that it should lead to a decrease of about $20 million or .7 percent.

Years before Scott launched his campaign, Florida had already taken steps that significantly lowered workers compensation. Scott promised to lower it substantially more and did sign a bill that should lower it a smidgen, but he's nowhere near his goal of a 35 percent reduction.

We rate this Promise Broken.

Sources:

Interview, Amy Bogner, spokeswoman Florida Office of Insurance Regulation, Jan. 7, 2013

Interview, John Tupps, spokesman for Gov. Rick Scott, Jan. 8, 2013

Florida Office of Insurance Regulation, Workers compensation annual report, Dec. 31, 2013

Florida House, H.B. 662, Signed by Gov. Rick Scott June 7, 2013

Rates were dramatically reduced -- under Gov. Jeb Bush

Fully a third of Gov. Rick Scott's promised 700,000 new jobs in seven years would come, his campaign plan said, from regulatory reform.

One plank of that regulatory reform agenda: workers' compensation costs.

"A 35 percent reduction in workers' compensation costs would save businesses approximately $2.46 billion," his plan said.

In 2000, Florida had the highest rates for workers' compensation insurance in the country, according to the Florida Office of Insurance Regulation.

But by the time Scott took office, a major reform package signed by Gov. Jeb Bush in 2003 had already sent rates plummeting more than 50 percent. The state now has the lowest rates in the Southeast, and the cheapest among the top 10 most populated states, according to OIR's most recent annual report, from December 2011.

What's changed since Scott took office? Rates have gone up an average of 8.9 percent — not the direction that Scott promised in his seven-year plan.

The good news for the state's businesses is that rates are still down 58.6 percent from 2003. The state will likely stay in the top 20 nationally for most affordable workers" compensation insurance, according to OIR.

But that's no thanks to the governor.

We asked the Governor's Office for an update on Scott's efforts to keep this promise. While the office provided written responses updating 26 other promises that were part of the same request, it didn't offer an update to this one.

Change could be on the horizon. The Florida Chamber of Commerce wants legislation this session to change the way some workers' compensation clinics repackage prescription drugs, a practice that contributed to the recent rate increase, News Service of Florida reported. That's a chance for the governor to work toward his campaign pledge — though it's unclear it would help him achieve a 35 percent reduction in rates that have already dropped 60 percent in recent years.

The governor promised significant savings in a system that's already realized dramatic reform. Florida's workers' comp system is now relatively inexpensive for employers, with healthy participation from private insurers. Rather than drop, rates have crept upward this year, with no evidence that Scott's working toward their reduction. While a push by the chamber could help fight that upward trend, it's not clear that will give Scott the reduction he banked on. We rate this promise Stalled.

Sources:

Florida Division of Workers' Compensation, 2011 Annual Report, Sept. 15, 2011

Florida Office of Insurance Regulation, 2011 Workers' Compensation Annual Report, December 2011

Florida Legislature's Office of Program Policy Analysis and Government Accountability, Financial Services Commission, accessed Jan. 5, 2012

Florida Office of Insurance Regulation, Fast Facts, November 2011

Florida Department of Financial Services, Division of Workers' Compensation, accessed Jan. 5, 2012

News Service of Florida via News-Press.com, "OIR: Workers comp system healthy," Jan. 4, 2011

News Service of Florida, "Session preview: Insurance issues take backseat, still important," Jan. 5, 2011