Health coverage bill advances

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A bill that would drastically expand health care coverage in California moved to the Legislative floor late Tuesday night, paving the way for a final vote by the end of the week.

It’s a key move for the measure that some are calling the most significant health care reform in half a century. The proposal aims to insure more than 1 million people who work but don’t get health care benefits from their employer.

The bill’s final version would cover about 4 million fewer people than originally proposed by Senate Majority Leader John Burton, D-San Francisco, earlier this year. But the bill’s backers say that if passed into law, it would still be a landmark victory for California’s uninsured.

The measure, SB2, would require businesses with 200 employees or more to provide health care coverage to workers and their families by 2006. Companies with between 20 and 199 workers would have to provide benefits to workers by 2007. That’s a year later for both phases than was proposed in the draft of the bill that went to the committee last week.

But under the latest draft, the bill would temporarily leave out the smallest of these businesses until the Legislature could agree on a way to offset the costs for the firms. Companies with between 20 and 49 workers wouldn’t get patched into the measure until the Legislature passes a tax credit to help these firms offset the cost of coverage to ease the burden of paying for their workers’ health care.

The new measure also strengthened the language to maintain the same level of coverage for people who now use the Medi-Cal or Healthy Families programs but who would be covered under the bill.

Companies that don’t provide coverage would have to pay into a state fund that would go toward insuring their workers.

Employees would need to work 100 hours per month or more to be eligible for coverage. The bill also caps how much businesses can require workers to contribute toward health care costs at 20 percent of premiums for most workers and 5 percent for low-income workers.

The bill will move on to the Senate and Assembly floors at the same time. It’s expected to hit the floor by Thursday or Friday.

The timing is key because the legislative session ends Friday. The bill’s backers want to ensure it gets signed by Gov. Gray Davis before the recall election could put a Republican in office who may be less friendly to the bill.

Supporters of the bill say that it would be a significant step toward covering the more than 6 million Californians who lack health insurance. It would save the health system money by shifting the uninsured from expensive reactive coverage — like emergency room visits — toward the lower cost coverage that uses regular doctors visits and other preventative medicine.

“The million people who would get covered by this are folks who work hard, pay their taxes and play by the rules,” said Anthony Wright, executive director of Health Access California, the statewide health care consumer coalition that is backing the measure.

The bill’s backers have varying estimates of how much it will cost businesses to pay for the new insurance, but the median estimate is about $1.5 billion per year. About 2.5 percent of the state’s businesses would be impacted by the bill, they say.

Opponents say the cost of insuring workers is so high that it could force businesses to cut jobs or shut down. They say that passing it while California businesses are struggling from the weak economy could further cripple the state’s businesses climate.

“Its a multibillion-dollar health care tax on both employers and employees,” said Richard Costigan, vice president of governmental relations for the California Chamber of Commerce. “It’s going to make California companies at a disadvantage to other states that we have to compete with.”

The chamber released a survey Monday saying the measure will cost businesses significantly more than the bill’s backers estimate: $5.7 billion per year.

One consumer rights group that backs the idea of universal health care is also worried about the cost of the bill. Although the bill caps the percentage of costs passed onto workers at 20 percent, it doesn’t fully protect against escalating premiums and doesn’t address copays and deductibles, said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights.

“The plan itself is good, because 80 percent of the uninsured are working,” Flanagan said. “The question is will they be able to afford their share of the benefits?”

Consumer Watchdog
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