As predicted by Labour, it looks like the government is getting ready to privatise areas of ACC.
An interim report from the ACC stocktake working group has said that opening up parts of ACC’s business to competition is workable. Minister Nick Smith was given the report a few days ago, but he’s keeping quiet so far.
National made a deal with ACT that in exchange for support for their last miserly ACC bill, passed recently, the government would open ACC to competition.
Anyone who experienced the disaster the last time ACC was opened up to private insurance companies will be steeling themselves up for a repeat of the terrible experiences of workers, health professionals and even employers.
The only people who benefited from National’s last foray into the privatisation of ACC were Australian financial institutions and the lawyers called in to fight legal battles. One of the major workplace insurance providers, HIH, later collapsed owing $1 billion.
Don’t be fooled by the rhetoric the government will use. What they call “opening up of ACC to competition” is actually “privatisation”.
National sees ACC and workers’ injuries and livelihoods as a tradeable commodity. Labour doesn’t.
We have said we will reverse any privatisation of ACC, but in the meantime, it’s coming our way.
I’d like to comment on the recent case of the woman who passed away four days after having her case declined by ACC
” the mother-of-three’s claim for counselling for sexual abuse she had suffered as a child was rejected by ACC two months ago on the grounds that she had not suffered “a significant mental injury”.
source: NZ Herald
This is NOT a new thing. My own case was declined in 1993. ACC seemed to think I would rather leave a job, then paying $52k per annum, in return for a $10,000 payout. That was the implication. I can understand wanting to weed out wrongful applicants, but I wonder how many people apply under this category who havent suffered such an “injury”, and subject themselves to the “expert” analysis and reports that are required to succeed?
17 years later and the same problem exists within ACC. I will say in defence of ACC that NO private insurer would cover for this. They might pay for your counselling, but no lump sum and no wage compensation so I applaud this aspect of social policy function from ACC. The effects of such abuse can be devastating and I have watched as friends get far more support for repetitive consented to sports injuries costing tens of thouands if not hundreds of thousands of dollars.
Loota sorry, but I’m still not convinced
Tracey you make good points. I also agree that ACC as social contract is a good model -in theory -, but in reality it is not working.
In terms of sexual abuse claims lets keep things in perspective: there is no hint of turning the non work related claims, including sexual abuse, over to the private insurers.
This is all about the Workers Account and in my experience with both business and personal insurance, the the good private insurers are more than capable at delivering the cover we need and can do so on lower premiums.
If you disagree that is fine but I would like to know why then did the premiums almost triple when Labour got back into government and reversed the privatisation?
Rebecca – Have you read the PWH report?
I’m wondering also if the opening up to other providers is comparing apples with apples. For example are all the things covered by ACC and tot he same extent, then covered by the new proviers? I also wonder if providers would, strategically hold premiums, to assist in the “attractiveness” and then once the platform is set, some certainty of longevity, they would rise like all othe rpremiums do?
I don’t know enough about the different industry private premiums to have the full understanding of the transfer of workers accounts.
I was not raisng the abuse as some kind of extreme viewpoint. Why should private providers pick and choose the things they cover and leave taxpayers to fully fund the rest? At least as it stands, by my understanding, the vast reserves are being built and built upon to cover such social policy. What hapens to the size of those reserves with the withdrawal of worker accounts to private sources? (genuine question not being picking or annoyed). I guess what I am saying is there is a trade-off (?) of sorts under ACC.
I also wonder how much we will spend on ensuring all businesses have the cover they need? Again, if the answer is bugger-all that’s fine.
Finally,
are you saying ACC is broken because your industry can cover the exact sames things as ACC privately for significantly less? One problem is we do not know yet what their pay out rates will be, because at the moment they are promised rather than practised.
Thw workers account coverage is for the benefit of the employee, not the employer. I am not saying therefore that a better price ought not be obtained BUT the principle is to ensure coverage for workers who suffer accidents. Therefore it is imperative that the new private provider provide EXACTLY the same benefits under their scheme.
Now, isn’t an insurer going to argue like hell that something is NOT a work related accident, so shifting liability back to ACC? So, decline the claim, await a challenge. A challenge is time consuming a costly. In the meantime, while pursuing the challenge the injured, is not being fixed. Bearing in mind that both National and ACT want less government in busines, will they strongly regulate to ensure EXACT provisions in policies and EXACT implementation, and how?
Just some thoughts.
“Employers
For the employers account, we can observe the following:
• ACC under its current structure performs comparatively well in
terms of overall cost, administrative cost and return to work
measures, with relatively high benefit levels.
• Comparisons elsewhere indicate that privately underwritten
workers compensation schemes as a group have higher levels
of administrative cost on average than government monopoly
schemes, likely driven the need to cover profit margins and
marketing expenses.54,52 The especially long financial tail of
the ACC would be expected to further increase any required
level of private underwriting profit margins.
• Comparisons elsewhere fail to establish any systematic
difference in remaining overall scheme cost levels between
government monopoly and private underwriting schemes.
• Workers compensation schemes which are closely
comparable to ACC (periodic income benefits, comprehensive
case management with coordination of a full range of benefits
and services, and a focus on qualitative claimant outcomes of
participation and independence) are all delivered through
government monopolies, whereas privately underwritten
schemes generally have a stronger focus on lump-sum
financial settlements.
• A change to private competitive underwriting of the ACC
employers account would require significant operational
regulation in order to ensure delivery against the Woodhouse
Principles.
These observations lead us to form a moderately strong view that a
government monopoly is the best observable mechanism for
implementing the ACC employers account. However, although
government underwriting seems the best fit based on available
information, the scheme’s own privatisation experience in 1999
shows private underwriting to be at least mechanically viable,
subject to sound regulation designed around the social objectives of”
“Self-employed and earners
There are to our knowledge no other ACC-comparable schemes for
the self-employed, which are generally excluded from workers
compensation schemes, nor for coverage of workers outside work
(although we note that such coverage is provided as an integrated
part of the workers compensation systems in the Netherlands and
Switzerland). Due to this lack of comparative evidence we are
unable to make any evaluative conclusions regarding the best
implementation approach for these accounts.” PWH
Thanks Sean – very much appreciated.
I personally don’t find the argument compelling enough, but it’s food for thought and now up to me to see if I can work out why I disagree. Anyway; Cheers.
Fair enough Phil, but obviously I find it compelling. The people who will ultimately pay the cost of failure of a system should control the process by which it can succeed.