Maybe Washington should look at Florida for help on workers' comp

Workers' compensation insurance rates will drop 6.8 percent next year in Florida, the state's insurance commissioner announced this week.

It's the seventh consecutive decrease in Florida's workers' comp rates, and it will save Sunshine State employers an estimated $166 million annually, officials announced.

The cheery news not only lies in stark contrast to Washington's recent announcement of a proposed 7.6 percent rate hike next year, but it also differs sharply from Florida's own not-too-distant experience.

Before a series of legislative reforms in 2003, Florida had the highest workers' comp rates in the country.

Last year, even as the nation struggled in a deep recession, Florida's workers' comp insurance rates dropped to 28th highest. The most recent reductions are expected to place Florida among the 10 lowest states in the country, according to the insurance commissioner's office.

It's a remarkable turn-around, and one that Washington officials would be wise to contemplate as they look at possible reforms -- something that Gov. Chris Gregoire has said she is willing to consider.

So how did they do it in Florida?

They passed reforms, including controls that slowed the rise of medical costs and lawsuit abuse reforms.

Right away, workers' compensation rates and costs declined 60.5 percent at a time when costs increased in neighboring Gulf states, according to an analysis by N. Michael Helvacian, a senior fellow at the National Center for Policy Analysis.

In 2008, the Florida Supreme Court struck down one of the central reforms -- a cap on the amount of fees workers' comp claimants attorneys can take from the benefits of injured workers.

Immediately, that prompted a rate hike.

But the state Legislature reinstated the cap, and Gov. Charlie Crist signed a bill in June, essentially undoing the high court's decision, according to the Jacksonville Business Journal.

"If it were not for this legislation, the workers' compensation industry in Florida would likely have proposed rate increases instead of decreases in 2010," Florida Insurance Commissioner Kevin McCarty said in a release.

Reform works.

Florida is a good example of that.