At first glance, workers’ compensation reform might seem like small potatoes.
That’s because its effects can be tough for people to see: The payroll of a small trucking business in East Peoria, a routine railroad repair job in Rochelle, salaries at a Springfield steel shop.
This type of blue-collar work is where employers can experience serious pain on their workers’ compensation bills. Those costs, the highest in the Midwest, kill jobs growth and higher salaries. That’s why some state politicians dismiss workers’ compensation as purely an economic issue. They say it should be off the table in budget discussions.
But they’re wrong. There are other unseen costs.
What many Illinoisans may not know is that this broken system greatly affects the ability of Illinois governments to care for the people most in need of public services. It is indeed a budget issue. And it lays bare the perverse priorities of our state.
Kim Zoeller is the CEO of the Ray Graham Association, a social service provider based in DuPage County that cares for 2,000 adults and children with intellectual and developmental disabilities. Nearly all of the group’s funding comes from state government.
The mission of the Ray Graham Association is not only to care for those people, but also to help them achieve more than they ever thought possible: A dream job, pursuing a passion, or simply the joy of living independently. That takes years of patience and hard work from nearly 400 employees.
But in 2010, something terrible happened.
While caring for one of the Association’s clients, an employee stumbled and suffered a sprained ankle. After many visits to different doctors, a later diagnosis of a generalized pain disorder, and years of litigation, the Association found itself on the hook for a $650,000 settlement.
All for a sprained ankle.
“It was like someone pushed us off a cliff,” Zoeller said.
That case radically increased the organization’s workers’ compensation premiums. What once was a cost that hovered around $460,000 annually now comes in at more than $1 million.
“You think about where that half-a-million-dollar difference could go,” Zoeller said.
She estimates it would be enough to cover the cost of residential support services for nine adults for an entire year, or it could be used to raise the base salary of her care providers.
“The provider community is very supportive of workers’ comp reforms for those reasons,” Zoeller said. “What’s frustrating is that it’s the same system that’s funding us that isn’t passing these reforms.”
The sprained ankle is only one example of government funds flowing not to essential services, but to pay for a system that is clearly flawed. Zoeller said the Association recently had to pay out $1,500 for a paper cut.
That’s not where taxpayers expect their money to go, especially when funding care for Illinoisans with lifelong disabilities.
A study released Nov. 29 by the Illinois Policy Institute shows the cost of workers’ compensation for municipalities, counties and state government in Illinois is more than $400 million per year.
If that’s not a budget issue, what is?
That estimate doesn’t even consider the other units of local government in Illinois, which together represent more than half of all government payroll costs in the state. Also left out are billions of dollars in public construction projects, all of which come with the inflated cost of workers’ compensation insurance here.
Instead of trying to solve this problem, legislative leaders have chosen to peddle wild conspiracy theories.
Steve Brown, spokesman for Illinois House Speaker Mike Madigan, has blamed high costs on insurance companies not passing along savings to customers. There is no evidence supporting this claim, and it would require collusion among more than 330 rival insurance companies in Illinois, in violation of federal anti-trust law.
And the trial lawyers who bankroll Madigan’s machine would have been all over any kind of insurance price-fixing scandal. After all, people and businesses harmed by federal anti-trust violations can seek triple damages.
Those trial lawyers like the system the way it is.
That’s why Illinoisans continue to see public dollars wasted on paper cuts, sprains and bruises. And it’s why reform is needed now more than ever.