Privatization of workers’ compensation has paid off for West Virginia employers – to the tune of nine consecutive years of reduction in loss costs. Since the system was taken out of government hands, the amount of money needed to pay all medical and indemnity costs associated with workers’ compensation claims, has fallen by an accumulated 48.1 percent.
Now, the National Council on Compensation Insurance has filed a proposed 8.8 percent overall decrease in loss costs, which it says will be worth another estimated $36 million to the state’s businesses, effective Nov. 1.
Regulatory surcharge reductions – from 5.5 percent to 5 percent – went into effect this year, meaning the total benefit of privatization to any business hoping to retain or hire more workers has been significant.
“With this reduction, West Virginia employers will have saved $250 million since workers’ compensation privatization,” explained Gov. Earl Ray Tomblin.
Time and again we see what we have been told are functions of government being handled more efficiently – and often more easily – when free market forces are allowed to do their work. In the case of a workers’ compensation system that was in the worst shape in the country a decade ago, privatization has meant safer workplaces, more money for business owners to invest into their companies and greater incentive for new businesses to consider setting up shop in West Virginia.
Perhaps West Virginia’s Legislature will take note, and cast its eyes on a few other government operations that could use an intervention from the private sector.