Maine’s Insurance Superintendent Approves Decrease in Workers' Compensation Loss Costs; Paves the Way for Lower Premiums

Maine’s Superintendent of Insurance Eric Cioppa recently announced approval of the National Council on Compensation Insurance, Inc.’s (NCCI) 2018 loss costs for Maine, which proposed an average loss cost decrease of 12%. With this approval, the new NCCI loss costs go into effect for new and renewing policies as of April 1, 2018.

NCCI is the advisory rating organization for Maine workers’ compensation insurance companies.

Loss costs are based on previous and projected losses and benefit payments employers are expected to incur. NCCI provides advisory rates for insurance carriers that offer workers’ compensation coverage in Maine. When such insurers file their rate requests with the Bureau of Insurance, NCCI-approved loss costs are available as a reference.

The loss costs change ranges from -10.4% to -15.1% depending on the industry; the 12% decrease represents an average. According to the Bureau of Insurance, because this is an average decrease, rates for some businesses will go up but most will go down. Also keep in mind that the loss cost decrease is only a recommendation; individual insurers may or may not accept the proposed change in loss costs.

“Maine employers’ efforts to improve workplace safety, return injured workers to their jobs in a timely manner, and control medical costs continues to pay off,” Cioppa stated. “This most recent decrease should result in lower workers’ compensation premiums on average across all industry groups.” Cioppa stated that recently filed NCCI loss costs represent a cumulative decrease of 59.5% since the 1992 workers’ compensation reform, and that if all insurers fully adopt the decrease, Maine businesses could save an estimated $27 million in the year following implementation.

MEMIC, Maine’s largest workers’ compensation insurer, will adopt the rate recommendation. MEMIC reports that this amounts to the largest rate reduction in more than 20 years.

Maine Bureau of Insurance: Opioid Prescription Claims Drop Between 2016 – 2017

In 2016, the Maine State Legislature enacted Public Law 2015, Chapter 488, “An Act to Prevent Opiate Abuse by Strengthening the Controlled Substances Prescription Monitoring Program.” This statute established limits on the duration and dosage of prescriptions that healthcare providers may write for opioid medications. The statute also tasks the Bureau of Insurance with studying the effects of this legislation on claims paid by health carriers and the out-of-pocket costs (coinsurance, copayments, and deductibles) paid by policy holders and certificate holders. 

According to a Maine Bureau of Insurance report, prescriptions for opioid painkillers in Maine have dropped off significantly, in no small part due to a prescription monitoring law that has been called one of the toughest in the country. 

The report specifically finds that opioid prescription claims dropped by nearly 20 percent, with about 27,700 fewer claims between the first half of 2016 and the same period in 2017. Further, the report indicates that insurance companies spent $2.4 million less on opioid and opioid derivatives, while plan members spent nearly $580,000 less.

The decline is thought to be a product of providers weaning patients off of painkillers or using safer alternative modalities for pain, such as physical therapy, massage, or other alternative treatments. 

The recent trend in Maine is part of a larger pattern. According to the U.S. Centers for Disease Control and Prevention, opioid painkiller prescriptions have dropped nationally in recent years after surging since the late 1990s and peaking in 2010. Maine topped the nation for the rate of prescriptions for highly addictive, long-term opioid painkillers in 2012. 

The use of opioids in the context of workplace injuries has been a significant topic of discussion in recent years. With increased awareness of the adverse effects of opioids, the use of alternative therapy, and the new monitoring law, expect the trends above to continue.