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As employers, labor unions, lawyers, insurers and medical care providers gird themselves for another round of battle in the decades-long political war over workers' compensation, a new set of data from the Workers' Compensation Insurance Rating Bureau is providing ammunition.

The multi-billion-dollar-a-year system provides payments and medical care for workers who incur job-related illnesses and injuries and approximately once a decade, those with stakes in the system clash over its rules governing eligibility for benefits, the level of the benefits, and payments to medical care providers.

The last such battle occurred in 2004, when a newly inaugurated Gov. Arnold Schwarzenegger, wielding an employer-sponsored ballot measure, bulldozed the Legislature into tightening up the system. The results was a dramatic reduction of costs and of insurance premiums paid by employers - but the new data indicated that both are starting to edge upwards and that insurers are beginning to lose money.

Insurers have sought premium increases for several years, but Schwarzenegger and former Insurance Commissioner Steve Poizner rebuffed them, saying that raising employers' costs would hurt the state's economy.

The insurers find solace in the new data, indicating that they are now paying out $1.16 for every workers' compensation premium dollar they collect, up sharply from a low of 73 cents in 2006.

Concurrently, insurers' costs for support payments to medical care and rehabilitation for disabled workers, which hit a high of $12.3 billion in 2002 and then dropped to $6.7 billion in 2005, have since climbed back to $8.1 billion, the bureau's report says.

Finally, employers are now paying an average of $2.32 per $100 of payrolls for workers' compensation coverage, up from a low of $2.16 in 2008 but still 62 percent lower from the pre-reform high of $6.29 in 2003. At $2.32, California's average cost is still one of the highest in the nation, according to a state-by-state comparison maintained by an Oregon state agency.

Not only do insurers want a premium increase, but labor unions and lawyers for injured workers want the criteria for benefits to be loosened and medical care providers want more money, thus setting the stage for a political donnybrook within the next year or two.


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