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Alexander and work comp reform

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By Merilee Dannemann

Ben Alexander was still going strong the last time I saw him, about 10 years ago, when he sat on a panel for a retrospective on the New Mexico workers’ compensation reform of 1990.  He had been an indispensable member of the task force that labored for months hammering out a compromise to save the state’s economy.
Alexander died in January at age 91. He is remembered for his political activism, chairmanship of numerous boards, philanthropic activity, and for always being willing to travel from his home town of Hobbs to wherever he was needed.   
He owned an oil well servicing company. In the mid-1980s, businesses like his were paying as much as $67 in workers’ compensation premiums for every $100 of payroll.  Construction and other labor-intensive industries had similar crippling costs, but Texas companies could work in New Mexico while paying much lower Texas rates. New Mexico was in real crisis. Insurance costs were so unstable that insurers simply stopped writing policies in New Mexico.
With the business community up in arms, the law was changed several times over five years, culminating in the 1990 reform. By that time, half of all policies were in the Assigned Risk Pool – the special class of insurance, extra expensive, normally reserved for bad risks.    
Each change was an experiment in attempting to get costs under control while preserving fairness. They involved direct challenges to formidable special interest groups, notably the trial lawyers. Ben Alexander’s great credibility was vital to overcoming these political obstacles.
With prices so punitive, the system simply could not afford the luxury of litigating the majority of individual cases. The work comp reform reduced the need for litigation by introducing formulas for determining benefits, and reduced the incentive for litigation by such radical measures as a statutory cap on attorney fees. It took hard work by many people in crisis mode to devise these changes. It took statesmanship by a leader like Ben Alexander, along with a few courageous labor representatives, to get the reform done.  
The reform involved a deal that is likely unique in New Mexico history. The task force had only two voting members: business and labor. The interest groups that make their living from the work comp system – insurance companies, trial lawyers, doctors, and so on – had no vote.
House Speaker Raymond Sanchez and Senate President Pro Tem Manny Aragon promised that if business and labor agreed, they would get the bill passed without amendment.  
Gov. Garrey Carruthers promised to sign it. That happened in a special legislative session in September 1990. The new law created the Work Comp Advisory Council, and its first chairman was Ben Alexander.
Premiums came down and the state was saved. In candor, that’s only partly due to the law. It was also due to the 1990s booming stock market. When markets are thriving, an insurance company can sell you a dollar’s worth of insurance for seventy-five cents, because it will make the other quarter by investing your money. The law itself had lots of problems, including inefficiencies and unfairnesses, and still does.
Alexander continued to worry about the “little guys” in the system: injured workers and small business. In that meeting 10 years ago, he told me of a few more changes he would like to have made, primarily to help small business.
Gerald Stuyvesant, who was director of the Workers’ Compensation Administration during that period, said recently, “Mr. Alexander was a true gentleman in every sense of the word…. Ben Alexander’s influence was essential in guaranteeing that if an agreement could be worked out, the Democratic political establishment would create the legislation necessary to affect its purpose.”
Ben Alexander is irreplaceable, but I sure hope somebody tries. We can always use leadership of that caliber.
Contact Merilee Dannemann through triplespacedagain.com.