Pinnacol's Recap of 2010 Legislation

Pinnacol at its website has neatly organized the 2010 legislation which it then reviews from its perspective. Included are links to each bill so you can read the bill itself. Pinnacol handles more workers comp claims then any other insurer in the state of Colorado. It certainly intends to be active in watching future legislative efforts and to be a voice for its point of view. The legislators noted are perhaps the most interested in fostering change in the system. How the political alignment changes after the coming elections may also affect future Colorado legislation in 2011. Injured workers are not as big or organized as business and insurance interests but should pay attention and support those legislators interested in change from their point of view.

Pinnacol Critical of State Committee

Pinnacol Assurance is the state's largest insurer in the workers compensation field. It is also a hybrid company originally created by the state of Colorado. Over the years it seems to have done very well for itself. A few months ago it was in the news because state officials were interested in tapping its reserves to use in the state budget. Lately a legislative committee also focused on it with testimony from injured workers. In any event Pinnacol is clearly upset with the committee and it posted its criticism on its website noted here. Using words like clear bias, not balanced, partisan and that "some" call it a witch hunt in its criticism won't help the situation. Legislators are simply reacting to events and calls for reform.

Interim Committee Report on Pinnacol

If you want to see some interesting materials on Pinnacol Assurance then click here.
This is the Interim Committee of some Colorado legislators that are concerned about the quasi-private/public company called Pinnacol Assurance. Pinnacol handles more then 50% of Colorado work injury claims and has been in the news quite a bit. I've always felt that Pinnacol is by no means the only insurer that can be criticized. It is however the one insurer that the state probably feels can be controlled more then others. Personally much of the criticism is really about the advantages that insurers have in a workers comp case perhaps because of a system that makes it easier to contest or deny benefits. We should speed up the system, look at those denials and low benefits that are simply unreasonable and change the law. Until then all insurers have some areas where they have an unfair advantage. What I would also like to draw attention to however are a few of the written letters to the committee that tell us we need to do better for injured workers. Here is one example worth reading.

Who Has A Gripe about Pinnacol Assurance?

A while ago Pinnacol Assurance was involved in a controversy about its extra revenues. The state of Colorado wanted some of that revenue to help with the budget shortfall. Pinnacol said it should be treated as a private entity so it opposed the effort. The state put off a confrontation but is now flexing its muscle to rein in Pinnacol. By the way Pinnacol is the largest insurer of workers compensation claims in Colorado. Its history is long but let me say it is neither fully private nor fully a public company. So now the legislators are hot on the tail of Pinnacol and Pinnacol is on the defense. A state audit is also underway. Clearly when Pinnacol seems to be thriving and the state is not then you can expect questions to be asked and more funds to go to the state and policyholders. Anyway now they are inviting those with cases or stories involving Pinnacol to come forth and tell a legislative committee all about Pinnacol. You can do this by email so for more on this click here. I am not sure that Pinnacol is the problem. What has happened in workers compensation is that benefits have been reduced and insurers have procedural and financial ways permitted by law to defend themselves and thereby increase profits. Example? If you hurt your arm but can still work in a low wage job you'll get at most a few thousand dollars for a permanent problem if the insurer has its way. So what if you lose your trade. Another example? When someone has a permanent problem with very real pain and medical needs many treating doctors designated by the employer will say you need 6 months or a year or two of medications. So permanent problem but temporary pain relief which allows them to limit future medical benefits. Another way is to close the case out as fast as you can so money is saved. All they are doing is using the law to their advantage. The old concept of liberally construing the law to favor claims was changed. It became a game where there is more to gain by contesting and limiting claims. Without a good lawyer the claimant often doesn't have a chance or may not even know he's getting less then what he might receive. But Senator Carroll is trying to get people to talk about Pinnacol and anyone can do so. Perhaps it will help change the workers comp system to level the playing field for all claimants.

Pinnacol Part 2...Why the Politics?

Colorado legislators are seeking some $500,000,000.00 from Pinnacol (the state's largest workers comp insurer which is also a political subdivision of the state) to help the state with education and perhaps other worthy matters at a time when the state is economically hurting. This has triggered much political debate and cries of foul from Pinnacol. Given the amount involved it seems clear that it is becoming a major battle. Money talks so they say. I must admit that Pinnacol has rallied much support that its excess funds are not up for the taking. This is well organized. Look at the Denver Post article with a photo of Pinnacol supporters. From what I have researched it appears that Pinnacol has $2 billion in reserves much of which came from insurance premiums and reduced benefit payouts. Of this amount some 700 million is excess or essentially slush money. The legislators seek 500 million and Pinnacol says that is wrong. What is certain here is that Pinnacol is far from being a private company. It was set up by the state, has a board appointed by the governor, does not pay taxes and has accumulated a huge surplus. Here is a quote from State Senator Carroll:

"Pinnacol is now trying to claim that they are like a private company, even though the statute says they are a “political subdivision”. This solution is not easy and not popular either.

"Pinnacol has managed to mobilize the business community in its defense. The business community should be pondering how much they have been overcharged in premiums for the company to have $700 million in surpluses above and beyond the $1.3 billion they have in reserves for known and anticipated claims."

It also appears that another bill was introduced to force Pinnacol to disburse back 5% to its policyholders (businesses) who also seem to have contributed to this huge growth. Clearly Pinnacol has made huge "profits" so does that state have a right to control some of that for the well being of its residents? The important thing to realize here is that Pinnacol is a hybrid that operates as a public and private business. But once it made huge sums it was bound to be considered as a source for state budget money. It was just as likely that big money makes Pinnacol want to remain big and private.

For injured workers I doubt this will have much impact. This seems more like an argument as to who gets the extra money. But what does seem a big concern is why was there so much extra money that accumulated? Could it be that businesses were charged too much or injured workers received too little? Makes you wonder....but this political issue is all about money and who controls it.

Tackling Colorado Health Insurance Rates

This is a bit off topic but it relates to a health issue just as workers comp and Social Security disability also have health issues. Rep. Carroll who I earlier posted on is active in trying to stem the uncontrolled hikes in health insurance rates. Personally I have come around to believe in a National Health policy. I just do not believe that our medical care should be in the hands of for profit companies. It forces conflict and waste. It should be paid for but under some universal system. In Colorado we are actually healthier then the national average and spend less then average on health care yet we are 7th highest in insurance rates. Rep. Carroll is introducing a bill to regulate this and not simply allow unlimited rate increases without going through the insurance commissioner. While I believe in free enterprise health like utilities or fire protection is too big a social concern to be left to profit making companies. The social compact we have as a country needs free enterprise but when it simply can't work and harms the country we need a different approach. Police, fire, the military and other safety minded agencies (FTC, FDA, SEC, the Fed etc.) exist because without them life would degenerate to survival of the fittest, wealthiest and most powerful. For now any approach to regulate health insurance is better than none so I support it. Intense lobbying will happen to kill this so watch for the insurance companies to try overwhelm us with fear ads as we get closer to a vote. For more information on this bill click here.

State Representative Carroll

Rep. Carroll maintains a blog and this link shows her concern for injured workers. She is in the forefront of efforts to provide fairness in the law. She is pushing HB 1176 mentioned previously in this blog. Bravo !
http://www.repmorgancarroll.com/blog

Her current position is state senator and visit her blog by clicking here.