Oregon Analysis Indicates Illinois Has Made Some Progress Since 2010 in Controlling WC Costs

Oregon’s Department of Consumer and Business Services earlier this month released its biannual “Premium Rate Ranking Summary”. Their analysis shows that the  2011 workers’ compensation changes have made an impact. Illinois ranked as the 3^rd highest cost state in 2010 moved one spot to the 4^th highest cost state in 2012. The Illinois Chamber had emphasized the previous Oregon rankings as one of the basis for advancing meaningful reform of our workers’ compensation system.

Oregon calculates premium rate indices based on data from 51 jurisdictions, for rates in effect as of Jan. 1, 2012.  National premium rate indices range from a low of $1.01 in North Dakota to a high of $3.01 in Alaska. The 2012 median value is $1.88, which is a drop of 8 percent from the $2.04 median in the 2010 study. One jurisdiction has an index rate in the $3.00-$3.49 range; 7 are in the $2.50-$2.99 range; 11 are in the $2.00-$2.49 range; 22 are in the $1.50-$1.99 range; and 10 have indices under $1.50. Illinois’ index rate was 2.83 which was a drop of 7.8% from 2010. Our surrounding states results were: Missouri saw a drop of 17% in its index rate; Wisconsin’s index rate dropped 3% to 2.15; Indiana which has an index of 1.16 saw no change from 2010; and, Iowa had an increase in its index rate of 4% to 1.90.

Several states had significant reductions in their index: Nevada- 67%; Texas- 49%; Montana- 33%; Alabama- 24%; and Michigan 23%. The one state significantly moving in the direction of a higher Oregon index was New York with a 17% increase to 2.82.

While the new Oregon data shows Illinois has reversed the trend it was in the last decade, Illinois still has a long ways to go to return our state to a competitive position when it comes to workers’ compensation costs.