Mapping the Maze of SIIS
A $2.2 billion unfunded liability currently exists in the State Industrial Insurance System, according to the insurance commissioner’s recent audit.
Over the last five years medical expenditures have risen an astounding 300-450 percent.
Since by statue, private insurance carriers are not allowed to write coverage in Nevada, SIIS can rightly be termed a government monopoly.
Reforms for SIIS must be linked to health care reform. Nevada Policy Research Institute recommends that Medical Savings Accounts be instituted to lower health care administrative costs, offer maximum choice to the health care consumer, emphasize individual responsibility for worker safety, and move government out of the realm of insurance provider.
SIIS reforms to streamline the benefit delivery system should not be limited to SIIS alone. At least seven other agencies directly affect SIIS determinations, in addition to the medical and legal communities, employers and injured workers, and organized labor.
SIIS is structured to be “no-fault” to avoid blame and therefore the possibility of expensive litigation. In return for ignoring responsibility for accidents, workers are guaranteed immediate medical attention and wage benefits. Unfortunately, over time, litigation has invaded the workers’ compensation program because the benefits have provided strong incentives.
The result of no-fault insurance has been a systematic redistribution of income. Income has been redistributed from responsible employer and employees to irresponsible ones, and less risky business firms to those which are more risky. This in turn, has reduced both profits and wages and increased unemployment.
Problems identified aside from the multi-agency overlap: * Nevada’s permanent partial disability payments are among the highest in the nation, * Increased costs make it more difficult for small businesses to survive, * Many entry points for fraud and abuse, * Statues and administrative codes relating to the Workman’s Compensation System are often liberally construed in favor of the worker, * Employers do not comply with safety standards.
Recommendations have been offered in each of the above problematic areas.
Nevada Policy Research Institute recommends that is study on Nevada’s Health: Options for Nevada’s Working Uninsured” be used as a companion to “Mapping the Maze of SIIS”.