Last year, California raised employers’ workers' comp premiums by 8.7% while other states continued to cut rates, some for over a decade straight. Across the nation, premiums are down as comp costs fall and insurer profits rise.

So why is California the rare exception?

According to the Workers’ Compensation Insurance Rating Bureau (WCIRB) and the state’s Insurance Commissioner, the answer is rising medical costs. But the data tell a different story entirely. California's workers' comp fee schedules are among the lowest in the nation, and insurers are reporting healthy loss ratios.

According to the WCIRB, it costs 51 cents to deliver every dollar of benefits to a California injured worker, nearly double the national median. The difference doesn't fund treatment; it goes to payers, vendors, and the private equity firms invested across the process.

Behind all of it is a foundational problem: California employers have no way to evaluate the system they're funding. They can't determine whether their injured employees are failing to return to work due to a genuine medical condition or because a payer is systematically denying care, inflating disability costs, and extending claims for profit.

A clear view into the system requires hard data on Utilization Review (UR), the process by which payers determine whether to approve the care recommended by an injured worker’s physician. The California Division of Workers’ Compensation (CA DWC), the state agency legally required to collect UR data, has refused to do so for nearly a decade, despite two separate legislative mandates.

Instead, the CA DWC has spent over $1.5 million commissioning toothless studies on nonexistent data. Until that changes, California employers will keep paying more for a system they cannot audit, question, or trust to spend their premium dollars efficiently.