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Workers' compensation benefits have long played a critical role in the American labor market. Simply put, businesses pay insurance for claims if a worker is injured on the job. The employee gives up the right to sue, but the employer pays medical costs and part of the wages while the worker recovers.
But a new investigation by ProPublica and NPR finds workers' comp is being substantially eroded. Over the past couple decades, legislators in more than 30 states have passed laws reducing benefits or making it more difficult in many cases to qualify for them. States have also cut off benefits after arbitrary time limits.
Let's hear from one of the workers who was profiled.
Joel Ramirez was paralyzed in a warehouse accident after a 900-pound crate fell on him in 2009. Last June, his home health aide was taken away after the state of California passed a new law.
His wife, Lupita, gave up her job to help him, including with his personal hygiene.
When he was walking before, he's a very, very strong man. Even — I said, I can't imagine. When I saw him like this, it just destroyed my soul, you know?
There was my mom here, but she's 75 years old. Oh, my God, I was trying to clean up. My God, I couldn't finish cleaning. So, I can't even do it right now. How am I going to do it when I get older?
Let's look more closely at the impact of all this.
Michael Grabell was the lead reporter on this for ProPublica. And reporter Howard Berkes of NPR collaborated with him.
Welcome to you both.
Howard Berkes, you listen to the story of Joel Ramirez, and you just wonder, how could he get by?
HOWARD BERKES, NPR:
Well, he had a very difficult time getting by.
He didn't get enough in workers' compensation benefits to replace the home health aide himself. It would have cost him about $500 a day to do that. He got barely more than that in an entire week of benefits. So it was a struggle. It was a struggle for the family. And there were times when he was left to sit in his own feces for hours because there was no one there to help him get clean.
He — one of the consequences of being paralyzed was that he was bowel incontinent.
Michael Grabell, tell us about the changes that have happened in workers' compensation laws over the last few decades.
MICHAEL GRABELL, ProPublica:
Well, what states have done is really three things. They have cut benefits. They made it harder to qualify for workers' comp benefits by raising legal standards. And they have also created a number of hurdles to getting medical care.
So, what's happening to these workers is, very quickly, they're seeing lower benefits, and they're seeing exactly the financial downfall that workers' compensation was supposed to prevent, or they're facing — they're having to battle for years in these administrative courts to get the medical care, even prosthetics in some cases, that their doctors recommend.
Howard Berkes, why are so many states moving to cut workers' comp?
Well, there are a couple of things that have occurred.
One is, medical costs have increased so dramatically over the years. But the other thing is, we have had a couple of recessions in the last 15 years, and states are competing with each other fiercely for business, and one of the things that businesses complain about all the time is the cost of workers' compensation insurance premiums. Some businesses are self-insured. It's the costs that they pay workers when they're injured on the job.
And so there's been what some people have characterized as a race to the bottom. As businesses complain about these costs, they go to lawmakers in state — in state capitals around the country and say, this is one thing you can do to help us compete with the next state. And, of course, each state is dropping costs, is lowering costs, so there's this competition to be lower than the next state, even as they continue to cut costs.
So, Michael Grabell, employers are, in essence, paying less than they used to for workers' comp?
Right, right. Despite the drumbeat for complaints about costs in workers' comp, we looked at the data, and a number of studies show that employers are paying the lowest rates that they have paid for workers' compensation insurance since the 1970s.
And there's only a few states that are paying anywhere close to what they were paying in the '70s. And the other thing is that insurance companies are also doing well. In 2013, they had an 18 percent profit on the workers' comp line, which was their best year since the 1990s.
And if you look at the comparison of how much workers' comp eats up of an average worker's paycheck, it's very small when you compare it to how much health insurance has been rising or how much retirement costs have been rising.
Now, we have another example I want everyone to hear. This is a man who was injured on the job, in this case in Oklahoma. He hurt his back lifting heavy rubber material, putting it on spools, lifting it up onto trucks.
His name is John Coffell. Let's listen to this.
We do live paycheck to paycheck. We have our budget set, and anything that offsets that budget is going to hurt us severely.
As soon as he got hurt, it was like, we went from being in a house with the kids and being a happy family to everything just falling apart in one swift motion. I mean, it really felt like somebody just shook everything in our lives and scattered it all over the place.
So, Howard Berkes, this is not atypical for these individuals who are hurt. And what we have learned is, there's a wide discrepancy from state to state in terms of how much people get for the kind of injury they have.
And this is really apparent when you talk about catastrophic injuries like arm amputations. So we looked at — we visited with two workers, for example, both living near the Alabama-Georgia border. On the Alabama side of the border, the worker who lost his arm in an industrial accident looked like he would get maybe about $48,000 maximum in his lifetime as compensation for his injury in weekly payments and in compensation for the loss of his arm.
But just across the border in Georgia, the worker there who had a nearly identical injury and an arm amputation, nearly identical age at the time of his injury, he will get somewhere in the neighborhood of $700,000 more over the course of his lifetime. That's if he doesn't go back to work.
And the difference is that, in Alabama, it's considered a partial disability, losing an arm. In Georgia, it's considered a catastrophic injury, something that is going to affect you for the rest of your life. So, there are these dramatic differences from state to state, and that's what some people see as the inherent unfairness of this system.
But for the state line, one worker might be taken care of, another might be in financial ruin.
Michael Grabell, just quickly, is there any move underway to try to even this out around the country?
Well, there's been some attention from the federal government, but — and OSHA — but, obviously, these are state programs, and the federal government has very little control over what states do.
There's a little bit of a push with — they're concerned about cost shifting to things like Social Security disability and Medicare to perhaps address those problems. But, hopefully, our stories will shine some light on this and create some attention. You know, lawmakers told us that if they saw — if the stories that we pointed out are a pattern, it was something they wanted to take a look at.
And just finally, Michael Grabell, you both were telling me that there's a constituency for business arguing for these changes in state legislatures, but no real constituency representing workers.
Yes, one thing that we heard over and over again, you know, is businesses seem to have the ear of the legislatures making these changes, and there's really no constituency for the future injured worker, because most people don't think about getting hurt until it happens.
Michael Grabell and Howard Berkes, it's a very powerful series of stories. We thank you both.
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