4. Our current L&I system is very EFFICIENT – Insurance companies historically didn’t make profits off of premiums charged and claims paid, rather, made a profit from investing those premiums and trying to make money off of the investments until money needed to be paid out on claims (note: this has changed in the last ten years or so and insurers are now, as a business model, trying to make a profit by delaying, denying and undercutting legitimate claims). Our 100-year-old L&I system in Washington is very efficient. It is non-profit, meaning the government isn’t making a profit on the system – unlike private insurers’ intentions under I-1082 – and due to the investments made by L&I coupled with the efficiencies of the single-payer system (similar to Medicare) – for every $1.00 paid into the system in premiums, $1.25 can be paid out in claims to injured workers. The proposed private multi-payer system (really? has that worked out so great with healthcare?) would only pay out $.40-$.60 in claims for every $1.00 collected in premiums.
5. I-1082 is risky for you – Another important tidbit about I-1082 gives me great pause. Workers Comp insurers, under I-1082, would be exempt from the State Guarantee Fund. This is the fund that pays out claims if the insurance company goes into receivership or liquidation (essentially bankruptcy for insurers). This is not unheard of – Reliance went into receivership and liquidation in the recent past -and AIG (ONE OF THE BIGGEST PROPONENTS OF I-1082) probably would have gone bankrupt without the government bailout. What this means is that if your employer buys workers comp insurance from an insurer who later goes bankrupt, you’re out in the cold. You cannot apply to the Guarantee Fund for compensation. Zip, Zilch, Nada. Now, imagine that you’re catastrophically disabled on the job and the insurer goes bankrupt 5 years from now and can no longer pay your medical or wage loss compensation. Where are you going to turn?