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Iowa Approves 7.9% Rate Increase In a Down Economy?


Iowa Approves 7.9% Increase in Rates (Ouch)

The state of Iowa Approves a 7.9 percent rate increase.   NCCI recommended that Iowa increase its Workers Compensation rates by 7.9% (3% effective 01/01/13 + additional 4%  on 07/01/13).  Iowa subsequently approved the rate increases. This was rather surprising in such a down economy.  Iowa for many years bucked the trend that a medical fee schedule is needed to keep Workers Comp costs in check.

Graphic of Iowa Approves Gold percentage and increase arrow

The trend-bucking may be coming to an end very soon.  I have always said states that do not have a WC fee schedule end up costing employers more than other comparable states.  For some reason,  Iowa stood alone in not having a medical fee schedule while keeping medical costs in check.

The bell may be tolling for Workers Comp medical costs in Iowa.  Up until 6 months ago, Iowa was still defying the medical fee schedule = lower Workers Comp costs scenario.

The effect of no fee schedule seems to have taken hold in Iowa.

According to NCCI:

  • 58% of total benefits in Iowa are now medical.
  • The % of medical benefits is increasing faster than other states
  • Overall costs are quickly catching the regional and national averages
  • The change in medical benefits greatly exceeded changes in indemnity benefits
  • No other reasons such as medical inflation, etc were found as root causes of the increase

    Cheerful Woman Iowa Approves Showing Hand Gesture

This is the normal time a state starts looking into a medical fee schedule.  Many states that have considered WC fee schedules usually wait until the situation is dire then switch to one.

Iowa should definitely consider having a medical fee schedule.  It is very easy to copy off another state and institute that fee schedule with follow-up adjustments.

The old warning concerning medical providers refusing to treat Workers Comp patients is very minor.  I have not seen that situation occur very often after a state enacts a Workers Comp medical fee schedule.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management 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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