Second Most Expensive State Is Montana
I noticed that the 2nd most expensive state is Montana. I have not posted for some time on the state funds. One article that caught my eye was on the Workers Compensation situation in the state of Montana. Montana had been off the news radar for a long time.
Please note that Montana is not a monopolistic state fund. <<Correction
Now, Montana has been ranked as the second most expensive state for Workers Compensation in the nation. I thought that I would look at what would cause this increase in rates when compared to other states.
One main consideration for high rates is that there exists a state fund such as Montana that writes a majority of the Workers Comp policies. The State Fund writes work-comp insurance, which insures businesses against on-the-job injuries, for 68 percent of Montana companies. This is a major percentage. Montana is not what one would call an open-market system. When the market is written by a State Fund that has more than 50% of the market, the usual insurance market system is not balanced.
Montana put the state fund’s actuary on the job to see what he could find as a reason. Only 9 percent of claims are permanent partial disability, but they account for 70 percent of overall work-comp costs, he said. The actuary said that PPDs in Montana occur at a rate 50 percent higher than the average in other states and that medical costs for such claims are twice as much as other states. If the number of PPD claims and their medical costs in Montana were at national averages, work-comp rates would be 30 percent lower, and Montana would fall to 20th-highest in the nation.
We shall see whether changing the PPD laws will have any effect. I think changing the Workers Comp market dynamics would help greatly.
