Who could have seen this coming? The state of Pennsylvania last year passed a law requiring insurers to cover certain cancers deemed work related in firefighters. Specifically, the law “provides that firefighters can receive workers’ compensation if they develop cancer and can establish it was caused by direct exposure to carcinogens at a fire or hazardous material accident”. The law took effect July 2011, and so far 67 firefighters have filed for benefits under the new requirements.

Instead of opening their checkbooks and cheerfully asking “how much will you need?”, the insurance industry responded by dropping fire fighting agencies from their book of business. This has left many departments scrambling for coverage, and has resulted in volunteer departments in particular being exposed.

So a law designed to help a specific group has had the unintended effect of stripping them of coverage completely. Huh. Who’d a thunk it?

It really is true that every action has an equal and opposite reaction. Nowhere do we get to see a better example of that than with the reform processes surrounding workers’ comp. It is especially true for our industry, for as I have said before, it is steeped in conflicting and contradictory interests that create tremendous difficulties when trying to reach a desired balance.

When you pass a law requiring other parties to pay for things with no commensurate provisions for the party burdened with the cost, this result is fairly predictable. The Pennsylvania case is another example of assumedly worthy intentions producing unexpected and undesired results. It turns out in reform that passing the financial bill to others is relatively easy. Getting them to stick around and play by your rules is far more difficult.

I am not suggesting that firefighters do not deserve adequate coverage, nor do I think the insurance companies are evil for dropping those agencies. I just recognize the inherent conflict between the two objectives. Insurance, after all, is a business. If a particular line of business is guaranteed to lose money, any responsible business person will make changes to that program. For this type of reform to work, insurance companies need to be given the opportunity to assess the risk and include it into the cost of doing business. Not to do so puts the entire basis of insurance as a calculated risk assumption out the window.

Of course, it is also possible that this reform was a “bridge too far”, in that it saddles an industry with costs of illnesses not truly of its own doing.

Pennsylvania instituted reforms to reach a particular goal. Now, as all too often happens, they find themselves needing to reform the reform, as the new problem they created is probably greater than the one they attempted to fix in the first place.

Welcome to the road to hell; an oft traveled route paved with seemingly good intentions. We’ve been here before, and will no doubt transverse this path again. It is our inclination to tinker, and the inherent nature of our industry beast.

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