If Hollywood made a movie about this year’s just-completed
legislative session, they’d call it “The Good, the Bad and the Ugly.”
Despite the recall election’s carnival atmosphere, the Legislature
passed significant reforms in the workers’ compensation system, which
is bleeding employers dry. The Legislature also finally passed
important legislation to prevent patients from being used as pawns in
contractual disputes between HMOs and medical providers, to protect
financial privacy for Californians, and to crack down on illegal tax
shelters used by large corporations, which are costing the state more
than $250 million every year.
However, partisan games stalled legislation to extend Megan’s Law,
which notifies local residents of any dangerous sex offenders who
live or work in their communities and which will expire Jan. 1. We
also failed to grapple with protecting working families from hefty
increases in the vehicle license fee.
For many legislators, reforming California’s workers’ compensation
system was a top priority. Today, we have the highest workers’
compensation premiums in the country, but benefits paid to injured
workers rank near the bottom of all states. Spiraling premium costs
hurt small businesses that can’t absorb sharp increases without
making drastic cuts elsewhere, like laying off employees or reducing
Our problem began in 1993, when the Legislature, acting at the
request of the California Chamber of Commerce and insurers, repealed
a law that set a floor for workers’ compensation premiums. While the
action was supposed to spur more competition and lower premiums, it
triggered a wild price war that destabilized the industry. Insurers
began underpricing their product, and rates plunged nearly 50%
between 1993 and 1999. As a result, numerous insurers went bankrupt
because their product was being sold below cost, and the few that
survived began steadily raising premiums.
As a member of the Assembly Insurance Committee, I reviewed more
than 60 bills to reform our compensation system. The final reform
package sent to the governor provides relief for California’s
employers and greater protections against fraud, while preserving the
core rights of injured workers.
Its reforms will save the workers’ compensation system more than
$5 billion, guaranteeing real reductions in the cost of this
insurance for employers.
The reforms cap medical fees and chiropractic visits, establish
utilization guidelines for medical treatment, and require using
generic drugs in most cases. The bill also eliminates vocational
educational programs and triples workers’ compensation fraud
While additional reforms are necessary, the State Compensation
Insurance Fund, California’s largest workers’ compensation insurer,
called the plan the most important reform effort in more than a
decade. For this reason, the California Manufacturers and Technology
Assn. supported this package of bills.
Another positive note for the Legislature this year was passage of
my Assembly Bill 1286 to stop HMOs from forcing patients to leave
their doctors when there is a contract dispute. Each year, thousands
of Californians are forced to change physicians during contractual
disputes between medical providers and HMOs. My legislation prohibits
HMOs from forcing patients -- including pregnant women, patients with
an acute or chronic condition or those awaiting surgery -- to find
new doctors because negotiations between their health plan and
physician have broken down.
The Legislature also passed, and the governor signed, the
strongest financial privacy law in the country this year (SB 1),
which will enable consumers to protect their private financial
information -- such as bank- account balances, spending habits and
payment history -- from being marketed to third parties.
And, finally, the Legislature approved my AB 1601, which cracks
down on the use of illegal tax shelters by some of our wealthiest
citizens and corporations, who are robbing the state of hundreds of
millions of dollars in taxes while hard-working Californians are
paying more than their fair share.
Now the Bad: I was greatly disappointed by the lack of support for
reducing the vehicle-license fee this year. While California
desperately needs the $4 billion in revenue the VLF nets, there are
fairer ways to raise those revenues than by balancing the budget on
the backs of working Californians. I intend to keep advocating a
reduction when we return in January.
Finally, the Ugly: Assembly Republicans killed legislation
extending Megan’s Law, a critical tool to protect families from
sexual predators who live or work in their communities. While the
measure, AB 1313 by Assemblywoman Nicole Parra (D-Hanford), passed
the state Senate on a unanimous 40-0 vote, Assembly Republicans
refused to vote for the measure, which required a two-thirds
majority. As a result of this ugly partisanship, California will be
the only state without a Megan’s Law, and we will lose millions in
federal dollars unless the Republicans reverse course.
The Legislature should reconvene this week to address the Megan’s
Law issue. Hopefully, both parties can come together and finish a job
we should have done before we adjourned.
* ASSEMBLYMAN DARIO FROMMER represents the 43rd District, which
includes Burbank. He can be reached via his Web site at
https://democrats .assembly.ca.gov/members/a43/ or call his Glendale
district office at 240-6330.