Legislative wrap-up: the good, the bad and the (really) ugly

DARIO FROMMER

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

employee benefits.

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request of the California Chamber of Commerce and insurers, repealed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

penalties.

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.