Editorial: Economic Gains
Workers' Comp overhaul a good start

The Bluefield Daily Telegraph, October 26, 2005

Businesses in southern West Virginia will be on a more even keel with their Virginia counterparts Jan. 1, when BrickStreet Mutual Insurance replaces the state's Workers' Compensation Commission.

Representatives in Bluefield last week to kick off a state-wide series of town meetings said businesses could expect an average 15 percent decrease in their premiums when the change takes place. Also, officials are working at a rapid pace to change the program from a state-run bureaucracy to a system that operates like a private-run insurance agency, which is as it should be.

Workers' compensation is an insurance program.

By next July, a payment schedule similar to a car insurance plan is expected to be in effect - a big benefit compared to the current quarterly rate schedule. Also agents are expected to be in place to work with businesses by the third or fourth quarter of 2006.

West Virginia has operated the Workers' Compensation program for 92 years, and during that time it disintegrated into a debt-ridden system rife with stories of abuse and fraud.

Some placed the blame on beneficiaries abusing the program, others at businesses dodging payments, and still others at health care providers allegedly milking the system.

Since a legislature overhaul in 2003, it appears there has been at least a kernel of truth in every story.

Given new powers to terminate benefits to those found guilty of abusing the system, the agency has cracked down on those receiving benefits unjustly. It has also moved on businesses skirting compensation payments and is now maintaining a sharp eye on medical costs.

BrickStreet Insurance Vice President of Operations R. Philip Shimer told the Daily Telegraph last week medical costs for 2005 are estimated at $165 million, a decrease from $225 million in 2003.

The program's deficit, at $3.1 billion last year, is also expected to decrease significantly when actuaries determine its current state this year.

We have emphasized that changes in the Workers' Compensation program are vital to the state's economic development. In an age when every state is jockeying for jobs, it is ludicrous to think big business would be attracted to a place where its compensation rates could be double - or more - than what they would pay in a neighboring state.

Improvements to the system will be good for business in West Virginia. And that, in turn, will be good for the people of the state, who for too long have had to move or watch their children leave home in a quest to make a living or secure a future for their families.

We commend lawmakers who have helped initiate change in the system, while cautioning against complacency.

The Mountain State has come a long way in moving toward a business-friendly environment, but we must remember the heavy competition that surrounds us - especially those of us in the southern counties.

The Commonwealth is a good neighbor but an impressive rival when competing for jobs. West Virginia must stay the course on economic development if it is to survive, and prosper, in coming decades.