Workers’ Compensation: Benefits, Coverage, and Costs, 2005

Source: Ishita Sengupta, Virginia Renor and John F. Burton Jr., National Academy of Social Insurance, August 2007

From press release:
U.S. workers’ compensation payments for medical care and cash benefits for workers disabled by workplace injuries or diseases declined in 2005, according to a study released today by the National Academy of Social Insurance (NASI). The drop in payments in 2005 (the most recent year with data) reflects large declines in California payments, as reforms enacted in 2003 and 2004 took effect.

Nationally, workers’ compensation payments for injured workers fell by 1.4 percent to $55.3 billion in 2005. The payments include $26.2 billion to providers of medical care and $29.1 billion in cash wage replacement benefits for injured workers.

California payments fell by 12.2 percent; a change made up of a 16.0 percent decline in medical payments and an 8.6 percent decline in cash payments. “The reduced spending for benefits and medical care reflects the initial stages of cost containment measures that were put in place in 2003 and 2004 reforms to the California system,” according to NASI member Christine Baker, who directs the California Commission on Health and Safety and Workers’ Compensation, a nonpartisan labor-management group that advises state policymakers.

Because it is a large state – accounting for nearly 20 percent of national benefit payments in 2005 -California altered national trends. Outside California, total workers’ compensation payments rose by 1.7 percent, an increase driven by a 4.1 percent increase in payments to medical providers. Cash payments to injured workers outside California showed a small decline (0.3 percent).

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