What's going on in California work comp?
Medical up - and so are premium rates.
California has long been seen as the leading indicator of social, business, economic and cultural change. Its $4.1 trillion economy just surpassed Japan’s, making it the 4th largest economy in the world (if it was a separate country).
The Golden State accounts for 21% of total US work comp benefits.
WCIRB’s excellent annual report is out…the findings are troubling indeed. We will dive into some of the details in future reports; here is key takeaways.
Medical benefits jumped more than 10% from 2023 to 2024.
Medical benefits now account for 54% of total benefits paid.
There’s no doubt rising medical costs are a, if not the, key driver of the Insurance Commissioner’s 8.7% increase in work comp premium rate.
Before we jump to conclusions, few if any other states are reporting significant increases in medical costs…however:
California data is much more current than most, and
few states have the breadth and depth of detail WCIRB does.
What does this mean for you?
The time to prepare is running out.
While I would agree things are getting out of control in CA workers' comp, look at the sum total payments to physicians, hospitals, DME, etc. It sums up to $2.12b. Then look at payments to attorneys in another section. Also, look at the %medical paid in the first year in CA vs. other states. Then look at disability. Costs are more driven by litigation and care delays than medical payments.
Do these statistics account for the large, apparent delays and outright non-payment errors in medical payments reported by daisyBill?