Md. workers' comp payments on rise

2003 growth is 3 times the national average

July 22, 2005|By Stacey Hirsh | Stacey Hirsh,SUN STAFF

Workers' compensation payments grew nearly three times faster in Maryland than the national average in 2003, according to a report released yesterday by the National Academy of Social Insurance.

Payments for injured workers in Maryland grew 9.4 percent to $628.5 million in 2003, compared with 3.2 percent growth to $54.9 billion in payments across the nation in 2003, the most recent figures available.

Meanwhile, the cost to employers for workers' compensation nationwide continued to outstrip medical and cash benefits to injured workers, the study found.

Workers' compensation is payments made to workers injured or disabled in connection with work.

John F. Burton Jr., a professor at Rutgers University's School of Management and Labor Relations and chairman of the panel overseeing the report, said the rising costs were a symptom of the cyclical insurance market.

"Employer costs reflect rising premiums insurers charge to cover future benefit costs," he said in a statement. "The recent rise in costs appears to be part of a longer cycle of ups and downs in the insurance market."

Employers nationwide paid $1.71 per $100 in wages for worker compensation, while injured workers received $1.16 per $100 in wages in 2003, the study found. Total employer costs in 2003 were $80.8 billion, while total worker compensation payments were $54.9 billion.

"The costs are very complex, but you shouldn't assume that these insurance systems work best by cutting back on what you pay workers," said Donald Elisburg, a Maryland attorney involved in workers' compensation policy issues.

Workers in Maryland received 70 cents per $100 in workers' compensation in 2003, compared with the national average of $1.16 per $100 paid to workers in both medical benefits and lost wages, according to the report.

Still, the increase in compensation payments to Maryland workers is outpacing the nation's overall growth in payments.

But that does not necessarily mean that Maryland workers are getting injured on the job at a faster pace, said Ishita Sengupta, an author of the report and a workers' compensation research associate at the National Academy of Social Insurance, a nonprofit organization of social insurance experts.

The national average was pushed down in part by some states that have a lower maximum payment to workers for injuries on the job, she said. Also, more industrial states require businesses to purchase workers' compensation insurance, while more rural states with industries such as farming don't require all businesses to have it - so more workers in Maryland might be eligible for workers' compensation than in other states.

Finally, Sengupta said, the payment increase might be sharper in Maryland because its workers are receiving the money owed to them.

"The workers actually get what they deserve," she said.

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