Once again, we are about to be subjected to semiannual rate reduction now expected in California workers' compensation insurance. This, we learned to expect, conveniently corresponds with the biweekly tongue-lashing the Insurance Commissioner delivers to the insurance industry, lamenting that insurers, and State Fund in particular, have been too slow in reducing premiums. To be accurate, we need to have the perspective that this show opened before Governor Schwarzenegger was elected to office:

"The law AB 227 [Vargas] and SB 228 [Alarcon] has very significant savings in it. Those savings will be real if insurers do their job," said Garamendi, who vowed to pressure insurers to pass along the savings to employers. (Sacramento Bee, Nov. 7, 2003)

Of course, once SB 899 (Poochigian) was enacted and a Republican Governor was getting a lot of the credit for reforming the workers' compensation system, the browbeating became unavoidable:

"The insurance industry thus far has not passed the full potential of their savings on to their customers,'' the commissioner said. (San Francisco Chronicle, Nov. 18, 2004)

Then, after the critics chimed in and considerable consternation was expressed by organized labor that the new permanent disability rating schedule actually harms injured workers and that allegedly necessary medical treatment was being denied, the rhetoric intensified, even if the numbers weren't entirely there:

"We have a situation," he said, "where hundreds of injured workers are saying they are not getting treatment, not getting benefits. ... The premium level to business is very high. What are the insurance companies doing here? Are they socking away enormous profits? Are they making up for losses in the past?" (Commissioner Garamendi, quoted in the Sacramento Bee, April 26, 2005)

And so, as we move toward another double-digit rate reduction, a modest initial recommendation from WCIRB was met with an equally tepid response:

"Rates have dropped and continue to drop," Garamendi said during a telephone press conference about the status of workers' compensation rates. But "there's more relief possible for employers." (Sacramento Bee, Aug. 9, 2005)

Ah, but once the Bureau decided there was more money left on the table, the Commissioner found his voice anew:

"As I have said repeatedly, insurers should take heed and pass the savings along to employers more quickly," Garamendi said. (Los Angeles Times, Sept. 10, 2005)

There will be similarly predictable pronouncements after the hearing this Friday, Sept. 16. The Commissioner will pull out his thesaurus and find new ways to deliver the same message, which in effect boils down to: "Until every employer who speaks to a newspaper says he or she is getting the premium reductions they want, you, the insurance industry, are reaping obscene profits and run the risk of having your rates regulated."

Just dial it in, Commissioner.

While the Commissioner issues soundbites, Assembly Speaker Fabian Nuez is already a page ahead in the playbook. Rather than stick to last season's script of threatening rate regulation, Nuez apparently concedes the savings and suggests that some of these dollars need to get back into the pockets of injured workers and, potentially, medical providers. According to the Los Angeles Times, the speaker's office issued the following harbinger for 2006: "[As] costs come under control, the speaker is confident that we can make further improvements to adequately ensure quality health coverage for all permanently injured workers."

This is the same speaker who derailed SB 292 (Speier), which would have put a lid on drug repackaging by physicians, an increasingly large loophole in reforms enacted under the Davis administration. SB 292 was supported by both the Chamber of Commerce and the California Labor Federation AFL-CIO, organizations that usually cannot agree with each other as to the time of day, let alone legislation.

Stalling this legislation in the Assembly Appropriations Committee was done under the guise of making certain everything relating to workers' compensation was still on the table for 2006, although that apparently didn't apply to a penalty bill sponsored by the California Applicant Attorneys' Association and its "wholly owned subsidiary" Voters Injured at Work. SB 1023 (Dunn) was shipped off to the governor's office, where it will meet an entirely appropriate veto. Perhaps a more fitting description of SB 292's fate would be that the ghost of outpatient surgery centers still haunts the lower house. The ghost is in the person of a former member.

The commissioner will have two more shots at pure premium reductions in 2006, an in-kind contribution from the insurance industry for his campaign for lieutenant governor.

Whether the commissioner will get involved in the legislative debate over-what is the appropriate word?- "de-forming" SB 899, remains to be seen, but given the attention the media will give to this issue, it is hard to imagine that Garamendi suddenly will be unavailable for comment.

Given that it is an election year, we also will hear from candidates for insurance commissioner. Of those, it would seem the likely winner is the current Lieutenant Governor Cruz Bustamante, if one believes the conventional wisdom that a Republican cannot win this race and that in the world of term limits it is just so chic to swap offices.

Bustamante, for his part, has taken a quiet stance on this issue so far. In fact, there doesn't appear to be any comment from the lieutenant governor on much of anything recently, let alone insurance or workers' compensation related issues. Such may be the luxury of a front runner, but it will prove impossible for him to avoid comment entirely. In the meantime, his contribution list speaks volumes.

One particular contribution warrants attention, a seemingly innocuous $1,250 check issued by the Calderon Group. Calderon, as in Tom Calderon, former chairman of the Assembly Insurance Committee and onetime candidate for Insurance Commissioner. Calderon is a paid consultant to the "Pharmacists & Physicians Alliance," the lobbying coalition that stalled SB 292 in the Assembly Appropriations Committee this year. The Alliance includes, well, you guessed it, outpatient surgery centers.

Come to think of it, Cruz, I'd keep my mouth shut, too.