Davis signs bill requiring health insurance for workers

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Associated Press

Gov. Gray Davis signed a bill Sunday that makes California the largest state to require employers to offer workers health insurance.

The bill, which was touted as a model for the rest of the country, could give more than 1.1 million workers and their families health insurance through a plan that would mostly be financed by employers. Hawaii, Washington and Oregon have similar employee-mandated health insurance systems.

“Today we take a bold step to reform health care,” Davis told a crowd filled with supporters holding “No Recall” signs. The governor was joined at the bill signing ceremony at a Kaiser Permanente medical facility by Rev. Jesse Jackson, actor Danny Glover, labor leaders, health care workers and members of the state Legislature who supported the bill.

The bill, by Senate President Pro Tem John Burton, D-San Francisco, requires companies with more than 200 employees to begin offering health benefits by 2006 to workers and their families. Employers will pay 80 percent of the premium, with employees paying the other 20 percent. Starting in 2007, smaller companies with 50 to 199 employees will be required to provide
employee-only coverage and share costs in the same manner.

“These are Californians who do exactly what we ask them to do,” Davis said. “They work hard and play by the rules. They can sleep easy at night knowing that if they’re sick, they can go see a doctor.”

Under the plan, employers can either buy insurance or pay a fee to the state. The state will purchase insurance for the workers through a new purchasing pool.

The Foundation for Taxpayer and Consumer Rights, a consumer advocacy group, welcomed the bill, but said the state must regulate health insurance premiums and doctors’ rates to make the plan work.

Davis said the plan, which covers about 32 percent of uninsured employees, could provide a framework for the rest of the nation.

The measure was opposed by the California Chamber of Commerce and other business organizations, which warned that it would be too costly and threatened job growth.

The Employment Policies Institute, a business-backed research group, said in a statement that the plan will cost California businesses $11.4 billion a year, with employers offsetting the cost by lowering wages, cutting benefits or laying off workers.

But Mike Garcia, president of the Service Employees International Union Local 1877, said the California bill was a strong model because it shifts health care responsibility to the private sector.

“The public sector can’t be expected to cover the whole costs, especially in today’s environment with the budget crisis and the high cost of health care,” said Garcia, whose union represents more than 25,000 janitors and other building service workers in California.

Christopher Mackin, president and CEO of clothing manufacturer Team X Inc., said at the bill signing ceremony that he endorsed the bill.

“As a business, we want to compete on quality and innovation,” Mackin said. “We don’t want to compete on the back of workers.”

He also said the bill made good business sense because it would reduce absenteeism.

Sen. Edward Kennedy, D-Mass., commended Davis and the state Legislature for enacting the bill.

“It is a model for the nation and an important step toward the day when the basic human right to health care will be a reality for all Americans,” Kennedy said in a statement.

Davis said nearly 50 percent of personal bankruptcies were attributed to unpaid medical bills and the new legislation likely would lower bankruptcies.

The governor also signed a companion bill that focuses on restraining health care costs by creating a commission charged with lowering the cost of health care coverage and prescription drugs.

The latest figures from the Census Bureau estimated there were 43.6 million uninsured U.S. residents at some point in 2002, up nearly 6 percent from the previous year.

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