Subject: Florida: PUTTING A PREMIUM ON PATRIOTISM - The only thing that can account for higher operating costs is what the companies pay their executives and employees.

The Palm Beach Post
January 14, 2002 Monday FINAL EDITION

Tom Blackburn

If you follow workers compensation in Florida - especially if you are an employer who pays for it - you might think 2001 never happened.

The companies are asking Insurance Commissioner Tom Gallagher for a rate increase. He turned them down in November. Their lobbyists are warming up for another run at the Legislature with a bill that died in the closing hours of last year's session. First, though, they want to take out humanitarian improvements the Senate added.

The new wrinkle is the excuse for this year's 4 percent rate increase: Sept. 11. Wrap me in red, white and blue and send me up a flagpole.

Many of the people killed or injured at the World Trade Center and Pentagon were covered by workers comp, but not in Florida. The argument is that, well, they could have been. Yeah, and cars were ruined in New York and Washington, but auto insurance isn't costing more here because of it. Yet.

Mr. Gallagher turned down a 7.9 percent increase last year because the companies couldn't prove their case. They are appealing his ruling.

Insurance cases are argued with reams of obscure statistics, but no one tries to claim that injured workers are getting more compensation than they did before the law was changed in 1993, because they aren't. No one is saying premiums stopped rising in price, because they didn't.

The National Association of Insurance Commissioners reports show that premium income for the companies doubled between 1993 and '98. More workers are covered. But legal and underwriting costs increased as a percentage of premiums.

The companies' answer, to the Legislature, is, "Get the lawyers out of the system." That's what lawmakers were trying to do last year. But the same figures from the insurance commissioners show that the cost of lawyers, as a percentage of the premiums, dropped considerably after 1993. The only thing that can account for higher operating costs is what the companies pay their executives and employees.

Mr. Gallagher's job is to keep them solvent, not to make them rich.

If the companies don't get their way in the Legislature - which would be new - it will be because workers comp advocates and lawyers are organized and ready to fight, for a change. They discovered last year that silence is the way to get rolled over.

Faced with obscure statistics and persuasive lobbyists, lawmakers need to know that the companies' analysis - which is before me as I write - covers only part of the problem. And half of the analysis is open to serious dispute. To fix the system instead of making employers and injured employees pay more for it, lawmakers would have to go back to basics.

The first basic is that the workers comp system is supposed to be self-executing, but nothing executes itself. Those lawyers the companies complain about get into the picture only if some injured worker, probably in pain, decides he or she is getting a runaround from the insurance company.

A "self-executing system" requires state oversight. Under the late Gov. Lawton Chiles, there was dirt-poor enforcement, and under Gov. Bush the Youngest, there is less. Enforcement should be provided by the Division of Workers Compensation, an overworked, understaffed agency prohibited by law from doing some things that need doing and not encouraged to do the rest. The division is the Flying Dutchman of state agencies because it is in the Department of Labor and Employment Security, which the governor and Legislature marked for destruction. Labor Secretary Mary Hooks calls that "embracing change."

If I were a lawmaker, I wouldn't vote until I had gone back to basics to trace what went wrong from there.

If I were an employer, before I paid the Sept. 11 bonus to my workers comp carrier, I'd talk to the lawyers' group, Florida Workers Advocates, or a victims' organizer such as Mary Bailey up in Jacksonville to see what they know that I should find out more about.