The “doctor-shopping” or workers’ compensation bill is taking center stage at the Iowa House this week. Business groups are taking to the air waves, and Republican political leaders are doing all they can to let people know the harm this bill would afflict on Iowa businesses. However, absent from the current debate is what this bill would do to the state budget, and more specifically, our local schools.
On the surface, House File 530 seems very simple: injured workers should get to direct their own medical care if they are injured on the job. They should get to choose their doctor and not be referred to a doctor or specialist chosen by their employer. What makes this issue not-so-simple is that, to make this legislative change, we will have to throw out our current workers’ compensation system that already provides the third best over-all benefits to workers in the country.
Currently, employers purchase insurance from specialized insurance carriers that write specific policies to pay for work-related injuries. If an employee is injured on the job, the insurance kicks in to pay lost wages, medical bills, and rehabilitation costs. Because the system is so well managed, Iowa employers rank 41st in terms of the premiums they pay. In other words, the efficient Iowa system allows employers to pay lower premiums to cover the cost of care for their workers, while also paying some of the highest benefits in the nation to the workers if they’re injured.
What House File 530 would do is throw out the existing system, which allows employers to control their costs by purchasing an insurance plan that limits who can treat their employees if they are injured on the job. This practice is no different from the common Blue Cross Blue Shield HMO that many people currently have.
For example, if I want to visit a chiropractor and want have it covered by my insurance, I need to make sure that I choose chiropractor who is part of my insurance network. If I want a plan that would cover a chiropractor not in my network, I would have to pay a higher premium for that option.
The National Federation of Independent Business estimates that making this change to Iowa’s workers’ compensation laws would raise workers compensation premiums by 15% to 20%. Many people think that only business owners will be affected by this bill, but they are gravely mistaken. House File 530 affects everyone.
The State of Iowa is the largest employer in the state. If the law changes to allow employees the right to select their own physician if injured on the job, it will come at a huge expense to the taxpayers at a time when we can afford it least, and when the state already has budget problems. Additionally, a change in the workers’ compensation laws would have a dramatic impact on the budgets of our local schools who are already dealing with budget cutbacks.
On average, Iowa schools paid $42,319.00 a year on workers compensation premiums in 2007. Under the Democrat’s proposal that figure would jump to $50,728.80. Now, if you don’t think an $8,400.00 increase is that big of deal, consider what it would mean to a large school district like Linn Mar in Cedar Rapids.
Last year, Linn Mar paid $251,642.00 in workers’ compensation premiums. A 20% increase would mean that they would have to find an additional $50,328.40 in their budget to cover the costs of House File 530.
Governor Culver has stated that there is “no cost whatsoever” to House File 530. Governor Culver is flat out wrong. The bill will have a major impact on local and state government, as well as our schools.
All of these entities are presently cutting whatever fat they can find out of their budgets in order to stay balanced and avoid raising taxes. Adding an additional burden to their budgets for the benefit of the vocal minority of union members seems counterproductive to say the least.
Last month, officials from the Independence and Oelwein school districts said that they expect layoffs for the next school year based on decreased funding from the state. In Independence schools, they may be cutting more than 13 positions beginning in July. Oelwein may cut up to nine positions. This was before Governor Culver and Democrat leaders decided to mess with Iowa’s workers’ compensation system.
Make no mistake, House File 530 is not just a bill that affects union members. It will affect every business and every taxpayer. The labor unions and legislators pushing this proposal should be forced to answer a simple question: What should we do…raise taxes to revamp a system that isn’t broken and is the model for the rest of the nation, or cut teachers?
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