West Virginian firms get another premium cut
West Virginia employers paid the nation's highest workers' compensation insurance premiums in 2003. The costs were triple the national average under a workers comp program run by the state.
That was 50 percent higher than runner-up California, where costs were only double the national average.
What a difference a decade makes.
The state began backing out of the insurance business in 2005, opening the state to full-fledged free market capitalism three years later. The result is workers' comp premiums have gone down, down, down.
A survey by the state of Oregon last fall ranked West Virginia as the 12th-least expensive state in workers' comp costs. Privatization pulled the state up from No. 50 to No. 12 in just a few short years.
From being triple the national average, West Virginia's workers' comp costs are now 18 percent lower.
Getting the state out of the workers' comp insurance business cut premiums by 48 percent - nearly in half - in the first eight years alone, as private companies did it better and cheaper.
And those costs will be even lower come November when a proposed 8.8 percent reduction in premiums takes effect.
That will save employers $36 million.
This will be the ninth consecutive year of reductions in premiums, said Gov. Earl Ray Tomblin, who headed the state Senate when it voted to privatize.
"With this reduction, West Virginia employers will have saved $250 million since workers' compensation privatization," Tomblin said.
"These savings demonstrate our willingness to address problems, within the workers' compensation market years ago, was the right decision for West Virginia employers and employees."
Businesses have begun noticing the progress nationally. The Small Business & Entrepreneurship Council ranked West Virginia No. 30 on its U.S. Business Policy Index in 2012.
"We are encouraged by the announcement that workers' compensation rates are going down," said Jan Vineyard, president of the state's Oil Marketers and Grocers Association, its Trucking Association, and the West Virginia Wholesalers Association.
State government can do many things right. Workers' comp is not on that list.