Senate gives preliminary approval to workers’ compensation bill

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(Host) The Senate has given its strong preliminary approval to legislation designed to reduce workers’ compensation costs for many businesses across the state. The bill achieves its biggest savings by cutting health care costs.

VPR’s Bob Kinzel reports

(Kinzel) In the past few years, many businesses in Vermont have experienced a dramatic increase in their workers’ compensation insurance premiums. The chairman of the Senate Economic Development Committee, Jim Greenwood, told his colleagues that there are essentially three reasons why this has happened.

The first is that many insurance companies have needed additional revenues to make up for losses in their stock market investments. The second is that several large companies experienced huge claims after the September 11 terrorist attacks and they’re now concerned about future terrorist activities. The third factor is the skyrocketing cost of health care that’s provided to workers who are injured.

Currently, Vermont has the highest medical reimbursement rates of any state in the northeast. Greenwood says this bill tries to address the health care issue by reducing fees paid to providers, aggressively seeking lower prescription drug costs and implementing tougher penalties for fraudulent claims:

(Greenwood) “This proposal, Mr. President, is a modest step and it’s not the end all or cure all of our workers’ compensation costs. But we believe it begins a process and it sends a message for sure that we are aware and that we are serious about this growing burden on Vermont businesses. We at the same time recognize that our workers must be protected and work in a safe workplace.”

(Kinzel) Some senators questioned the wisdom of reducing fees paid to health care providers. Rutland senator John Bloomer called the practice another example of shifting costs from the public sector to the private health insurance market – a move that Bloomer said would reduce workers’ compensation costs but would also increase health insurance expenses for many of the same businesses:

(Bloomer) “I am very, very concerned that what we’re doing is using what I classify as ‘smoke and mirrors’ to try to show that we’re saving money.”

(Kinzel) The measure will come up for final approval in the Senate on Wednesday.

For Vermont Public Radio, I’m Bob Kinzel in Montpelier.

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