From the Los Angeles Times
Sacramento Democrats merge health plans
Legislative leaders will press ahead with a joint
proposal that would require state employers to spend 7.5% of payroll.
By
Jordan Rau
Times Staff Writer
June 22, 2007
SACRAMENTO —
California employers would be required to spend 7.5% of payroll on the health of
their workers, and the state could increase that rate without legislative
approval, under a plan announced Thursday by the Capitol's two top
Democrats.
The proposal, a merger of two measures that recently passed
the Assembly and Senate, would rely on businesses to reduce the number of
Californians without insurance. It lacks any requirement that people obtain
insurance — a cornerstone of Gov. Arnold Schwarzenegger's proposed
approach.
Republicans and business leaders have objected to the
Democrats' approach all year. But the leaders do not need their support to move
the new bill through the Legislature.
The bill would demand more of
businesses than either the previous Senate or Assembly measure. Companies that
did not spend the requisite amount would have to pay into a state fund that
would provide insurance to their workers. Assembly Speaker Fabian Nuñez (D-Los
Angeles) agreed to drop an exemption for small businesses and start-ups that the
Assembly had approved.
"The Democrats in this building are now united,"
said Senate President Pro Tem Don Perata (D-Oakland), speaking at a Capitol news
conference.
The employer requirement would be nearly twice the 4% of
payroll that Schwarzenegger suggested in January. And the new bill would make it
easy for the rate to be increased above 7.5% without legislative approval; it
would empower an independent panel dominated by gubernatorial appointees to make
adjustments to keep up with rising medical costs.
"This plan will do
nothing to address the rising costs of healthcare and will only devastate our
state's small businesses," said the leader of the Assembly's Republicans,
Michael Villines of Clovis.
Health insurance premiums rose 8.7% in
California last year, according to the California Health Care Foundation, an
Oakland-based nonprofit group. The average annual cost for employer-provided
coverage for a family was $11,860, the group says.
The Democrats' plan
reflects confidence that they can prevail in negotiations with Schwarzenegger as
they seek to refine the measure into one he will sign. The governor has promised
a major healthcare overhaul this year, and many Democrats believe that he will
be reluctant to veto what they place before him.
The governor's proposal,
outlined in January, aims to spread the financial burden of universal health
insurance among employers, hospitals and doctors through $4.4 billion in
assessments — fees, the governor says — on those industries.
Republican
legislators have balked at that approach as well. And no one in the business
lobby or the healthcare industry has endorsed the governor's plan, although
Schwarzenegger has received international praise for wanting to insure all
Californians.
Further complicating Schwarzenegger's approach is an
opinion from the Legislature's nonpartisan lawyers that the levies on medical
providers are a tax, not a fee. The governor campaigned for reelection last year
on an anti-tax platform. And tax measures require some Republican support to
pass the Legislature.
But at his own news conference in a Sacramento
neighborhood Thursday morning, Schwarzenegger dismissed the significance of the
legal opinion.
"I don't get caught up in these details," he told
reporters. "I want to create healthcare for the people, and to me I look at it
as a fee, I stick with that. And if someone else wants to call it something
else, they can figure that out later on."
Schwarzenegger contended that
"the only way that the healthcare reform is going to work is if you have
mandatory healthcare insurance" coupled with a mandate that insurers not exclude
anyone from coverage.
He praised "a great mood in the Capitol of working
together" and predicted a satisfying compromise before the Legislature adjourns
in September.
"What you see now is not really what counts," he said.
"Always what counts is, what is the outcome? And as you know, it can turn very
quickly … because in the end, like I said, everyone wants to make this work."
Business lobbies faulted the Democratic plan for not doing enough to
keep healthcare costs down and for placing the financial onus on employers to
cover 3.4 million Californians who currently have no health
insurance.
The National Federation of Independent Business headlined its
statement objecting to the plan: "Merging of healthcare bills tightens noose
around necks of small-business owners."
The Coalition to Advance
Healthcare Reform, a group of insurance companies and large employers that
already offer worker coverage, issued a statement expressing "concerns" about
the Democrats' reliance on employers to fund their plan. They also said the plan
does not do enough to keep medical costs down.
In many
ways, the Democratic proposal is a more comprehensive version of California's
last stab at healthcare reform, a 2003 law that required employers to provide
insurance.
It was narrowly repealed the next year. Schwarzenegger
supported the repeal, saying the law — which would have applied only to
companies with at least 50 workers — was too burdensome to business.
This
year, Schwarzenegger has said he would support requirements on business as long
as other players in the healthcare industry were required to share the cost of
expanding coverage.
On Thursday, the Democrats said their bill, AB 8,
does place some burden on groups besides employers. Insurers would no longer be
allowed to deny policies to individuals, except those with the most serious
medical conditions. They would pay into a state pool to take care of the
sickest.
The bill also would ensure that all children in poor and
working-class families have health insurance, something the governor included in
his proposal.
"I think our bill is pretty consistent with [the
governor's] concept of shared responsibility," said Nuñez. "Everyone's got a
role to play here. Everyone's got to tighten their belt."
jordan.rau@latimes.com
Times staff writer Evan Halper contributed to
this report.
--
(INFOBOX BELOW)
Democrats' plan
A
healthcare plan announced by Democratic legislative leaders Thursday
requires:
Employers to spend 7.5% of payroll on worker
health
• Insurers to sell coverage to all but the
sickest
• Insurers to spend at least 85% of premiums on medical
care
• The state to subsidize insurance for children and the
poor
• Insurers to subsidize coverage for the very
sick
--
Los Angeles Times
Copyright 2007 Los Angeles Times