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Illinois – Expensive State For Workers Compensation?

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Expensive State For Workers Comp-Illinois

 The State of Illinois ranks as one of the most expensive.  I was reading over the Illinois Abstract on Workers Comp from WCRI. Even though there was a supposed reform in Illinois over the last few years, the Workers Comp costs have remained high.  A quote from the press release –

Map Of Illinois Expensive State Graphic
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“WCRI found that the 2006 price regulations had a short-term impact on the trend on medical payments per workers’ compensation claim.  Medical payments per claim grew two percent from 2005 to 2006, following the direct impact of the new fee schedules. However, medical payments per claim increased an average of nine percent per year after 2006. This was similar to the growth prior to the introduction of the 2006 fee schedule, which limited fee schedule growth rates in the rates to changes in the general consumer price index or CPI. The main driver of this post-reform growth was related to hospital inpatient and outpatient payments per claim.”

A medical cost growth rate of 9% annually is not staggering when compared to California.  Illinois and California are both post-reform for Workers Comp.  I decided to look further into why there was such a sharp increase in medical benefits.

Hand Illustrating Illinois Line Graph
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As I have posted very often, the way that Workers Comp tabulations affect the E-Mods is as a very delayed system.  In other words, patience is a virtue as in the case of Illinois.  According to NCCI  Illinois’s medical severity is actually decreasing since 2008.

The average medical cost for a claim in the Lincoln state was approximately $4,000 more per claim than the countrywide average.  This has been reduced to $0 in 2010 when compared to 2008.  I am pointing this out as many companies want a Risk Manager or Safety Department to show immediate results.  It just does not work that way.

The bottom line is the medical rates did grow in Illinois at 9%.  They were growing steadily nationwide.  The reforms are showing four years later as medical costs are decreasing. This is the same cycle as the E-Mod for Workers Compensation premiums.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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