The Florida Office of Insurance Regulation intends to increase the region's workers' compensation rates by 6.1 percent effective Jan. 2013, the state's insurance commissioner announced on Monday.
The decision to approve the hike was based on testimony offered by the National Council on Compensation Insurance (NCCI) in an October 4 hearing, which followed the Council's latest rate filing.
"NCCI has provided sufficient evidence to support a rate increase based on a variety of cost factors experienced in the marketplace," says Florida Insurance Commissioner Kevin McCarty. "Even with this rate increase, Florida's rates are still 56 percent below the rates prior to the 2003 reforms, and are competitive with other states nationally. However, I look forward to working with Florida's policymakers during the upcoming legislative session to address cost-drivers in the system."
According to the evidence submitted by the NCCI, addressing Florida's physician drug dispensation issue would decrease rates by 1.1 percent. The Workers' Compensation Research Institute (WCRI) reports that Florida has the second-highest level of physician-dispensed prescriptions among the states studied by the Institute, and that such drugs represent almost half of all workers' comp prescriptions in the state.
Another 5.5 percent would be saved if Florida aligned its costs with the rest of the states for in-patient hospital, out-patient hospital and ambulatory care center (ACS) reimbursements. Currently, 68 percent of the sunshine state's total benefit costs are medical, compared to the countrywide average of 59 percent for medical benefits, and higher than the national average for the services listed above.
A seven-year rate decline trailed Florida's 2003 workers' compensation reforms, although the Office signed off a premium increase of 7.8 percent for new and renewal business in 2010, an increase of 8.9 percent in 2011, and this most recent proposal of a 6.1 percent increase.
In 2010, McCarty similarly reasoned that Florida would still have the "lowest rates in the southeast" after seven years of consecutive cumulative declines.
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