Lt. Gov. Matt Denn (D) says information needed to determine potential increases to the state’s workers comp premiums should not be as hard to obtain as it has been.
His comments come after state officials, the Delaware Compensation Rating Bureau and Public Advocate Fred Townsend cancelled a hearing on rate increases Monday. After brief public testimony, the parties announced a return to private negotiations.
Allan Schwartz, an independent actuary retained by Public Advocate Fred Townsend, submitted testimony for Monday’s hearing outlining missing information from the Delaware Compensation Rating Bureau.
Legislation passed last year requires DCRB to submit medical cost data to the state quarterly, but Schwartz says it didn’t send the latest information until last week. He contends the organization had that data as early as January.
Denn, chair of the state’s Workers Compensation task force, says that worries him. He notes Schwartz’s latest recommended premium hikes would’ve been between 9.5 and 11 percent, compared to DCRB’s filing of 38.52 for residual market rates and 41.75 percent for voluntary market lost costs.
“Because what we see is that – and this latest change in the numbers is a good example – when we finally get some of the information that has not been provided in the past, then it tends to argue in favor of lower premiums,” said Denn.
“The more of that actual medical payment data [Schwartz] has been receiving, it looks like the more he has been concluding that the actual medical cost trends are not as bad as the [DCRB] has been claiming in their application.”
If approved by the Department of Insurance, DCRB’s workers compensation premium increases would total 107 percent for residual market rates and 94 percent for voluntary market lost costs since Dec. 2011.
That’s worried Delaware business owners, as they’re required to carry workers compensation insurance by state law.
The Department of Insurance originally scheduled public hearings on the rate filing in November, but Denn’s Workers Compensation Task Force urged them to postpone it, saying DCRB had not released medical procedure and prescription drug cost information to Townsend.
16 task force members sent a letter to the public advocate and Insurance Commissioner Karin Weldin Stewart Tuesday, telling him to stand firm on Schwartz’s findings.
It stated, “To negotiate upwards from Mr. Schwartz’s findings would reward the DCRB for providing incomplete information to rate-setting authorities, and would impose an unnecessary and unjustified burden on the Delaware businesses who must ultimately pay these rates.”
Since the original filing in October, the idea of replacing DCRB with another agency circulated among task force members, but they hold no power to oust the organization.
That authority lies with the Department of Insurance.
When approached after her department’s Joint Finance Committee budget hearing Tuesday, Stewart refused to answer questions regarding workers compensation, saying her office had no comment.
No deadline has been set for completing the private negotiations to end, but public hearings will resume should no conclusion arise.
