http://www.latimes.com/news/local/la-me-health7may07,0,4141456.story?track=ntothtml
Healthcare reform's unlikely ally: big business
A big-business coalition, breaking ranks with smaller
firms, will lobby Sacramento and D.C. to expand coverage to all.
By Jordan
Rau
Times Staff Writer
May 7, 2007
SACRAMENTO — Abandoning the
business lobby's traditional resistance to healthcare reform, a new coalition of
36 major companies plans to launch a political campaign today calling for
medical insurance to be expanded to everyone along lines Gov. Arnold
Schwarzenegger is proposing for California.
Founded by Steve Burd,
chairman of the Safeway grocery chain and an ally of the governor, the coalition
could boost efforts in Sacramento and Washington, D.C., to overhaul healthcare
laws. It also formalizes a growing division over the issue among
businesses.
The coalition includes some of the nation's largest
companies: PepsiCo, General Mills, Pacific Gas and Electric Co., Wm. Wrigley Jr.
Co., The Kroger Co., a number of Safeway vendors and grocery item manufacturers
such as Bumble Bee Seafoods LLC.
It also includes insurers and drug firms
that probably would benefit from mandated health insurance: Aetna, Blue Shield
of California, Cigna HealthCare, Eli Lilly and Co. and PacifiCare.
Such
large firms already provide medical coverage to their employees and have become
increasingly frustrated as premiums have increased over the years. That has made
them more willing to look to the government for solutions.
But small and
midsized operations, such as restaurants and retail stores that usually don't
provide coverage, have resisted wholesale changes to healthcare
laws.
California's Chamber of Commerce and the state's restaurant
association led the successful ballot fight in 2004 to repeal a state law
requiring companies with more than 50 workers to provide insurance.
The
chamber and restaurant group are skeptical of Schwarzenegger's proposal and
those offered by Democratic legislative leaders.
Schwarzenegger's plan
would require all individuals to obtain health insurance, hospitals and doctors
to subsidize insurance for the poor, and companies to spend a set amount on
employee healthcare.
The Democrats who dominate California's Legislature
have several proposals that include similar requirements for employers but do
not insist that everyone get insurance.
Schwarzenegger's proposal to
insure everyone in California, unveiled in January, was influenced by Burd's
views. The governor was particularly drawn to financial incentives instituted
for Safeway workers to encourage them to seek preventive care, stash money for
future illnesses and address ailments such as diabetes before they become
debilitating. Schwarzenegger has incorporated such ideas into his proposal.
Burd's group has embraced two of Schwarzenegger's central concepts:
requiring everyone to be insured and providing financial assistance to the poor
to help them purchase coverage.
That framework also forms the basis of a
proposal in Congress, sponsored by Sen. Ron Wyden (D-Oregon), that has some
bipartisan support. But the coalition's "core principles" steer clear of how to
pay for subsidies and what requirements, if any, need to be placed on the
nation's employers.
Burd said he hoped that his Coalition to Advance
Healthcare Reform would help employers see that inaction would be
devastating.
"Most people believe [healthcare reform] does not get done
without good business support," Burd said, "and we've assembled a coalition of
people who believe business has a responsibility to make sure people get the
healthcare coverage that they need."
The coalition is the latest to form
this year as lawmakers face off over a plethora of proposals to overhaul the
healthcare system. AARP, which has 3 million members over 50 in California, last
week launched a television campaign to encourage state lawmakers to provide
"quality, affordable healthcare now."
A number of unions, insurers and
healthcare providers have their own coalition to encourage action on the state
and national level.
The coalition intends to press state and federal
lawmakers beginning today in Washington, D.C., and in Sacramento on Thursday.
Burd said he already is talking to legislative leaders in both places and hopes
that as the coalition grows, its influence will expand.
In Sacramento,
the coalition could lean hard on Republican legislators, who have come out
against the idea of forcing people to buy insurance. GOP leaders — who side with
business on many issues — say it is unrealistic to aspire to universal coverage.
Instead, they say, the state should emphasize better access to medical
care.
"For Republican legislators, the business community has been an
important constituency," said Adam Mendelsohn, Schwarzenegger's spokesman. "And
when you have businesses standing up and saying, 'The healthcare system is
problematic for us; fix it,' that presents a dynamic that has been missing in
previous healthcare debates."
But Scott Hauge, director of Small Business
California, an association with 2,700 member companies, said Burd's effort
drives a "wedge" into the business lobby that hurts his efforts to press
legislators to contain rising healthcare costs.
He said that when
Schwarzenegger announced his plan, Burd publicly said its requirement that
employers spend at least 4% of payroll on healthcare was too low.
"When
you get Safeway going out saying it should be more, they're chopping our knees
off," Hauge said.
But Burd said that the climbing cost of healthcare is
an "emergency," adding that by 2015 costs will eat up 22% of the country's gross
domestic product, damaging corporate competitiveness worldwide.
"By next
year, the average Fortune 500 firm will have a healthcare bill that exceeds its
net income," Burd's coalition says in its statement of principles.
Burd's
political efforts have drawn derision from Safeway workers, who accuse him of
hypocrisy.
That is because the company, which is based in Pleasanton,
Calif., and other grocers are in a dispute with unions over how long new
employees must wait to acquire health benefits, among other issues. Hourly
employees wait a year or more; their families wait 30 months.
"This is
coming from the guy who eliminated healthcare" for thousands of workers in
Southern California, said Michael Shimpock of SG&A Campaigns, a Pasadena
media and political consulting firm hired by the United Food and Commercial
Workers union to speak about the negotiations.
"I would be very dubious
before I would accept" the coalition's position at face value, he
said.
The coalition says its members employ more than 1.7 million
workers, and 18 of the companies are among the Fortune 500's biggest firms.
"I think we're going to find that as the debate gets louder and because
the cost associated with healthcare can't continue to climb the way it has,
you're going to see more employers get engaged," said Ed Hanway, chairman of
Cigna Corp., which provides insurance for Safeway's managers and salaried
workers.
jordan.rau@latimes.com
*
(INFOBOX
BELOW)
Comparing potential prescriptions for healthcare coverage
A new business coalition intends to lobby for changes to the healthcare
system. Some of those changes are included in Gov. Arnold Schwarzenegger's
proposed healthcare overhaul and those of state legislative leaders. A
comparison:
Coalition to Advance Healthcare Reform
•
Health insurance required for everyone
• Subsidized insurance for
those with low incomes
• Preexisting conditions
covered
• Incentives for healthy behavior and
prevention
• Tax deductions for individuals who buy
insurance
• Costs of care revealed to consumers
Gov.
Arnold Schwarzenegger
• Health insurance required for everyone
• State-subsidized insurance for those with low
incomes
• Companies with 10 or more workers provide insurance or
pay into a state fund
• Incentives for healthy behavior and
prevention
• Insurers could not refuse to sell policies to anyone
or charge unhealthy people more
• Insurers spend at least 85% of
premiums on healthcare
• Increased state payments to doctors and
hospitals that treat the poor
• Fees assessed on earnings of
hospitals and doctors
• State-subsidized insurance for all children
from low- and moderate-income families
• Tax-free savings accounts
allowed for the purchase of high-deductible insurance
Democratic
leadership plans*
• Almost all employers must provide health
insurance or pay into a state fund
• Workers must accept employer
insurance if offered (Assembly plan only)
• Insurers spend at least
85% of premiums on healthcare
• State-run insurance purchasing
pool
• Incentives for healthy behavior and prevention under
state-arranged insurance
• State insurance for all children from
low- and moderate-income families
• Mandatory insurance for
families with moderate incomes or higher (Senate plan only)
•
Insurers could not refuse to sell policies to anyone (Senate
only)
• Insurers must offer some plans with uniform benefits
(Assembly only)
Republican lawmakers' plans*
• Expand
neighborhood healthcare clinics to ease emergency room crowding
•
Tax-free savings accounts allowed for high-deductible insurance
•
Increased state payments to doctors and hospitals that treat the
poor
• Medical providers get tax credit for unreimbursed
treatment
• Reduction of mandates on what insurers cover
• Help for small businesses that join to buy insurance (Assembly
only)
• Employers may buy combined health and worker-compensation
coverage (Assembly only)
• Preexisting conditions covered (Assembly
only)
• All First Five funds spent on children's healthcare (Senate
plan only)
Other legislative
proposals
•
Private insurers replaced with a state-run system (bill pending in
Senate)
• Premium increases regulated like auto coverage rates
(bill pending in Assembly)
* Leaders of the Senate and Assembly have
separate plans; provisions exist in both plans unless otherwise
noted
Source: Schwarzenegger administration; California Senate and
Assembly; Coalition to Advance Healthcare Reform