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  6.  » State-Funded Monopoly Versus Privatization: The Ohio Workers’ Compensation Debate

State-Funded Monopoly Versus Privatization: The Ohio Workers’ Compensation Debate

There is a political conversation happening in Ohio regarding the privatization of Ohio’s workers’ compensation system. Governor elect John Kasich has often advocated the privatization of some state agencies, including perhaps the workers’ compensation system. Presently the Ohio workers’ compensation system is funded by employers doing business in the state of Ohio and is known as a monopolistic state fund. Those in support of privatization suggest that it would be possible to lower the cost to Ohio’s employers and give more choices to consumers if private insurance carriers were able to compete for Ohio workers’ compensation coverage, or if the process was taken entirely into the private sector.

Evaluating The Benefits Of A Monopolistic State Fund And Ohio Workers’ Compensation

Recently, a few economists and national insurance companies have suggested a move from a monopolistic state fund, to a competitive market where the state’s fund would continue while private insurance carriers would compete with the state to offer employers additional options. This idea is not a new one to the state of Ohio. In 1981, an attempt was made to add an amendment to Ohio’s constitution which would allow private insurance to compete with the state run system. It was heavily defeated.

Presently, a task force (chaired by Senator Timothy Grendell) has been charged with evaluating our present workers’ compensation system as well as other state’s systems, considering alternatives and making recommendations for the future. The 23-member task force is composed of legislators, employees, employers, local government officials, insurance companies and third-party administrators. Ohio is the largest of four states that retain a state funded insurance system.

Experienced And Proven Source On Ohio Workers’ Compensation Issues

While there seems to be a substantial energy (and profit incentive for private companies) to consider privatization options for Ohio’s workers’ comp system, the facts don’t necessarily bear out this argument. As the author of “Ohio Workers’ Compensation Law,” who has made significant contribution to Ohio workers’ compensation legislation, and with more than 35 years experience as an Ohio workers’ compensation lawyer, I can provide all historical context, legal underpinnings and extensive analysis on a monopoly state fund and the issue of privatization (or a competitive blend of private insurance with a state funded workers’ compensation system).

In 2005, I testified before an Ohio House State Government Committee. In my comments I noted that “Ohio is a model of the benefit of a state insurance fund… Since 1995, premiums are down an average of 32 percent for private-sector employers. Ohio has premium rates lower than the national average and lower than all of our neighboring states of Michigan, Indiana, Kentucky, West Virginia, and Pennsylvania, and over $10 billion in premium dividends have been returned to employers.”

I have contributed to the conversation at all levels — with legislators who develop Ohio’s workers’ compensation system, discussion in political circles, testifying before government agencies and committees, cooperation and work within the Ohio Bureau of Workers’ Compensation (Ohio BWC) as well as speaking in public and private forums. I believe in the healthy model of political debate, but I am most concerned with what is best for Ohio’s employees — those who are injured while at work in the state of Ohio, as well as an environment of fairness and effectiveness for the Ohio employers who fund this system. I have invested my life’s work to protect their interests and to constantly improve the Ohio’s workers’ compensation system.

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To learn more, contact the Philip J. Fulton Law office: call 614-963-9569 or send us an email to discuss the political and economic implications, legal underpinnings and historical context of this important issue.