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Opinions Differ On California’s Workers’ Compensation Plan

Sacramento, CA — Governor Schwarzenegger says the sweeping workers´ compensation changes he pushed through the Legislature two years ago have been a huge success, but critics call them a disaster for injured workers.

The governor says the legislation has resulted in a 40 percent drop in employers workers´ comp insurance costs. But the actual drop in employer costs may be less than that. State Insurance Commissioner John Garamendi said last November that workers´ comp insurers had cut their rates about 26 percent on average since the middle of 2003 despite a more than 46 percent drop in the cost of paying claims.

Critics say that much of the savings has gone into insurance company profits while injured workers have seen their benefits cut and treatment delayed by new utilization review requirements.