CALIFORNIA Officials approve reform package
Gov. Schwarzenegger called the bill's passage a victory for California.
SACRAMENTO, Calif. (AP) -- Handing Gov. Arnold Schwarzenegger one of the biggest victories of his new political career, the state Legislature approved an overhaul of California's workers' compensation program, the most expensive in the nation.
The bill passed the House 77-3 and the Senate 33-3. Schwarzenegger plans to sign the bill Monday at a Boeing Co. aircraft factory in Long Beach.
California's 91-year-old system has some of the nation's highest insurance premiums for employers and some of the lowest benefits for injured workers.
The bill aims to save employers billions of dollars by setting a higher standard of proof for workers claiming to be injured; requiring employees to use doctors approved by their employers and their insurance companies; and imposing stricter time limits on medical benefits.
"We cannot continue to force our businesses, nonprofits and government agencies to be pummeled by costs 2 1/2 times the national average," said Republican Sen. Chuck Poochigian, the bill's sponsor. "This bill gives California businesses and their workers a fighting chance."
Big victory
The bill is considered a major victory for businesses, local governments and nonprofit groups that have seen their workers' comp premiums soar. Business groups had complained that the costs were driving employers out of California.
Schwarzenegger had made workers' comp reform a centerpiece of his administration. Lawmakers acted Friday to meet a deadline set by the governor, who had vowed to put an even tougher measure on the Nov. 2 ballot if they did not pass the bill.
"Why have we waited this long to do these reforms?" asked Republican Assemblyman Russ Bogh. "It's no accident, let's be honest. We are here today because of one thing -- because over 1 million people answered Gov. Schwarzenegger's call for signed petitions to reform workers' compensation."
The actor-turned-politician previously rescinded the state's $4 billion car tax shortly after taking office in November and last month persuaded voters to approve $15 billion in borrowing to ease the state's budget deficit.
"We can declare victory, victory for California," Schwarzenegger said after the bill's passage. "Just a few weeks ago, they said this was impossible. It just shows the impossible is possible."
Rising costs
California's workers' comp costs have soared in recent years from $6.4 billion in claims paid in 1997 to an estimated $17.9 billion last year. The average employer cost of dealing with workplace injuries also has gone up dramatically, from $2.68 for every $100 of payroll in 2000 to $6.30 per $100 last 2003 -- the highest rate in the nation.
Most workers' comp systems are more limited than California's, which covers all industries and all workers, including employees of small businesses and up to 900,000 farm workers. California also covers many injuries and occupational diseases that other states do not.
Opponents of the bill, including attorneys and many injured workers, have largely blamed insurance companies for the surge in premiums.
The reform package would reduce disability payments from five years to two years and require workers who are accustomed to choosing their own doctors to pick from a pool of authorized physicians. Supporters say that will stop injured workers from "doctor-shopping" in search of a more favorable diagnosis.
Also, employers would be liable only for the portion of an employee's injury that occurred at work.
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