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View Diary: Rob McKenna would bring private profit into workers' compensation as Washington governor (17 comments)

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  •  Is this cost effective? (2+ / 0-)
    Recommended by:
    chipoliwog, mookins

    I don't see how it could be with insurance companies skimming the fund for their profits.
    The Workman's comp fund must then feed two  bureaucracies - the State and the insurance industry.

    •  The cost savings may come from private (1+ / 0-)
      Recommended by:
      mookins

      insurers being more diligent on claim fraud, while the state prevents the insurance company from denying valid claims. Insurance companies are also highly motivated to get their underwritting correct - so they don't overcharge (lossing business to competitors) or undercharge (not charging enough to cover claims).  Insurance companies are more motivated to control costs than a state agency that has little pressure to keep insurance premiums low and no competition.

      In addition, private insurance see profits from investing the float of money from premiums rather than underwriting.

      If the state is responsible for paying claims from the funds it collects, I would expect to see a bias in the agency to deny valid claims. Under the California system, the state does not have an economic interest to rule against workers.

      The most important way to protect the environment is not to have more than one child.

      by nextstep on Thu Apr 19, 2012 at 03:07:50 PM PDT

      [ Parent ]

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