Recent revelations about SAIF Corporation have caused some to demand that the state get out of the workers’ compensation insurance business — and rightly so. There are many solid reasons to privatize SAIF.
SAIF insures only 40 percent of Oregon’s workers, and there are over 400 private companies licensed to sell policies in the state. We don’t need government participation in such a market.
SAIF proponents argue that because the state requires firms to carry workers’ compensation insurance, it should provide these policies. But the state requires many things it doesn’t sell, such as automobile liability insurance, seat belts and motorcycle safety helmets.
SAIF supporters also argue that a state-run company reduces insurance costs. But because it has a monopoly on insuring state workers, it is likely shifting costs from businesses to taxpayers, thus masking total costs.
A 2003 Cascade Policy Institute report concluded that SAIF has hundreds of millions of dollars in excess reserves, surplus and financial cushion. On the open market, the net assets of SAIF and the Industrial Accident Fund are worth $2 billion. This money should be returned to whom it belongs — policy holders and taxpayers.
SAIF is an historical artifact. The trend is for states to get out of this business and let the private sector do what it does best. Let’s do the same and privatize SAIF.
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