Future of Maryland Workers’ Compensation Faces Adversity

Workers’ compensation in Maryland has faced numerous pressures that have not always had the injured workers’ best interests in mind. In fact, state reforms to workers’ compensation generally side with large companies and health insurance providers that seek to cut costs and increase their profitability. The future of workers’ compensation is at stake for a variety of reasons, with the rising costs of health coverage being at the forefront of those problems.

Stagnant to Low Wage Growth Reduces Employers’ Insurance Premium Growth, All Under Rising Cost of Medical Care

According to the Insurance Journal, wages have remained steady in recent years and are still slightly below recession levels. This means that, while fewer people are unemployed, stagnating wages are ruinous to the workers’ compensation market. “Salary stagnation or low growth of wages will have a telling impact on the workers’ comp industry in the future for the simple reason that payroll growth is necessary in order to have premium growth,” according to John Leonard, CEO of a workers’ compensation specialist insurer. Covering the medical cost of the claim will become increasingly challenging while wages remain low or stagnant while medical care continues to skyrocket in cost.

Rising Cost of Healthcare Means That Workers Get Left to Pay for Their Injuries

Twenty to 30 years ago, the medical component of workers’ compensation claims used to make up 40 percent of the cost, while the wage replacement aspect made up 60 percent, according to Leonard. Those numbers have been reversed. Now, 60 percent of a claim’s cost is associated with medical care. But are workers getting injured more often than in the past? The answer to that is no. Most industries are much safer than they were 20, 30, or 50 years ago. Injury rates are down as safety standards have risen. There are still, of course, hundreds of thousands of workplace accidents that put workers in the hospital every year, but overall, the Maryland and U.S. workplaces have become safer. So why is the percentage of medical care so much greater now than in the past? The answer to that is that the cost of healthcare has grown dramatically. According to The Balance, in 1960, the U.S. spent $146 per person on health coverage, which, adjusted for inflation, is $1,200 in today’s dollars. In 2015, the national healthcare spending was just under $10,000 per person. A sicker, older population is partially to blame for this. Obesity, coronary illnesses, and preventable type II diabetes, all caused by poor diet and lifestyle, certainly do not help lower the cost of healthcare. However, a larger cause of rising healthcare costs is due to unregulated costs of pharmaceuticals and insurance. Insurance providers and pharmaceutical companies have seen huge financial growth at the expense of the American public, and injured workers, who have a harder and harder time receiving the care they need. Injured workers are often left to foot their own medical bills.

Contact an Attorney Today

If you were hurt on the job, call the Maryland lawyers of Frame & Frame today at 410-255-0373. We will begin working on your case immediately.