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Posted on: Aug 19, 2019

Six cents. Since 1975, workers' compensation charged premiums paid by employers have increased by only six cents.

In 1975, employers paid $1.98 per $100 in payroll.

In 2019, employers paid $2.04 per $100 in payroll.

That's according to the recent "State of California's Workers' Compensation System" report released by the Workers' Compensation Insurance Rating Bureau (WCIRB) last month.

The WCIRB report also shows that total medical costs paid per claim have decreased by 23 percent since 2012, 2018 was the fifth consecutive year of a combined loss and expense ratio of 90 percent or less, and average returns on net worth have increased significantly in California since 2012, going from 3 percent in 2013, to 7.9 percent in 2015, to 8.7 percent in 2016, and to 9.9 percent in 2017.

Meanwhile, a new report shows that CEO pay has increased 940 percent since 1978, while employee wages have only increased 12 percent. CEO's earn, on average, 248 percent more than the average worker.

It's a boon for employers and insurers. And who's the scapegoat for increased workers' compensation costs? The WCIRB points the finger at workers in the Los Angeles Basin and San Diego areas making less than $500 per week who resort to filing cumulative trauma claims after years of hard work.

Yet the frictional costs are derived from the insurers' own denial of claims. A Lockton Cos. report issued last year showed for every 100 denied claims in California, only 18 actually stayed denied. The other 82 denials were reversed. In fact, the 82 percent of denied-then-paid claims cost an average of $27,419 while claims that weren't denied cost $16,833.

According to the WCIRB's report, almost 75 percent of CT claims are initially denied.

Rather than blaming low-income workers, perhaps insurers should be reevaluating their own claims practices.