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California comp premiums expected to remain flat

Posted On: Aug. 17, 2017 3:20 PM CST

California comp premiums expected to remain flat

Workers compensation premiums in California are expected to remain flat in 2017 after doubling between 2009 and 2015, according to a report released Wednesday by the California Workers’ Compensation Research Institute.  

Premiums continued to grow in 2016 by 3%, but slower than the double-digit growth since 2010, the report showed. Analysts during an institute webinar on Thursday afternoon said lower rates are to blame for the lack of premium gains, yet growth in the economy has helped level premiums.

A countrywide comparison show that California continues to have the highest rates among states at $3.24 per $100 of payroll in 2016 compared to the national median of $1.84, per a report from Oregon, which studies state data every two years. 

California’s higher rates can be attributed to high frequency of permanent disability claims at more than double the national median, high medical costs per claim, a more prolonged pattern of medical treatments, and “much higher-than-average costs of handling claims and delivering benefits,” the report states. 

Meanwhile, average pharmaceutical costs paid per transaction in California decreased by 26% in 2016, due largely to changes in federal government drug pricing. The report also showed that opioid transactions are also down: $5,129 per 100 claims in 2016 compared with $8,871 in 2015 and down to one-third of what was spent in 2013.   

Analysts said on Thursday they do not yet know how the upcoming workers comp drug formulary in California will further affect pharmacy costs.