NASI: Ore. Workers’ Comp Payments Down in 2002

In Oregon, total workers’ compensation payments fell to $448 million in 2002, a decline of 1.8 percent from the 2001 level of $456 million, according to a new report (See National news) released by the National Academy of Social Insurance (NASI).

For the first time, NASI’s study shows the change in medical and cash benefit payments separately in each state.

In Oregon, payments for medical care rose, while cash benefits to workers declined in 2002. Payments for medical care rose to $227 million in 2002 from $217 million in 2001, a 4.8 percent increase. Cash payments to compensate workers’ for lost wages fell to $220 million in 2002 from $239 million in 2001, a drop of 7.7 percent. While total workers’ comp payments in Oregon fell in 2002, total payments for the nation rose. Nationally, workers’ comp payments grew by 7.4 percent to a total of $53.4 billion.

For the nation, workers’ comp payments rose faster than wages for the second year in a row in 2002. “This occurred in part because wages grew hardly at all, following the economic recession that began in March 2001,” noted NASI Study Panel Chair John Burton, of Rutgers University. The year 2002 saw the slowest growth in wages in more than a decade (0.4 percent) and a decline in the number of covered workers for the second year in a row.

Nationally, workers’ comp total payments for cash and medical benefits per $100 of wages grew by eight cents, to $1.16 in 2002 from $1.08 in 2001. This is lower than the peak in 1992, when benefits were $1.68 per $100 of wages. Spending for medical benefits contributed to the increase in total payments. Nationally, spending for medical benefits rose by 9.4 percent, while cash payments to workers rose by just 5.8 percent.

Total employer costs rose by 13.0 percent in 2002 to $72.9 billion. Costs to employers reflect premiums charged by insurers and benefits plus administrative expenses of employers who self- insure. Employer costs per $100 of wages rose to $1.58 in 2002 from $1.40 in 2001, but still remain well below their 1990 peak of $2.18 per $100 of wages.

“Because each state has its own rules for workers’ compensation,” Burton noted, “it is essential to have comprehensive and consistent national and state data to evaluate the impact of these programs on workers and employers.”

The report, Workers’ Compensation: Benefits, Coverage, and Costs, 2002, is the seventh in a NASI series that provides national data on this largely state-run program. The study provides estimates of workers’ comp payments — cash and medical — for each state, the District of Columbia, and the federal programs providing workers’ comp benefits.