Health Care for All?

While state legislators are trying to work out the details of getting more health insurance coverage for California workers, apparel-industry executives and small-business owners are wondering how much it will cost them.

A bicameral conference committee is studying three bills that might be merged into one bill to be voted on by the state Legislature before it adjourns on Sept. 12.

There is a big push to get some kind of comprehensive health care bill passed and put on Gov. Gray Davis’ desk before the recall election on Oct. 7. Estimates show that about 6.7 million people in California have no health insurance, with about 70 percent of those being the working poor.

The three bills being scrutinized include:

Senate Bill 2 (SB2), sponsored by state Senate President Pro Tem John Burton (D-San Francisco) and state Sen. Jackie Speier (D-San Francisco/San Mateo), would require employers to either buy insurance for their workers and dependents or pay a health care coverage tax into a state fund.

Assembly Bill 1527 (AB1527), sponsored by Assemblyman Dario Frommer (D-Glendale), is similar to Burton’s bill but exempts small-business owners. It requires employers with 51 or more employees to provide health insurance to employees and their dependents or pay into a state fund for health care coverage.

Assembly Bill 1528 (AB1528), sponsored by Assemblywoman Rebecca Cohn (D-Saratoga), requires employers to pay 80 percent of the health care costs of their employees and their dependents, with the employees paying the remaining 20 percent.

There was a fourth health care coverage bill: Senate Bill 921 (SB921), sponsored by state Sen. Sheila Kuehl (D-Santa Monica). The universal health care coverage bill would set up a single-payer state-run insurance program to replace existing coverage. It would cover all Californians and control the growth of health care spending through a simplified administrative structure.

But SB921 has been taken off the legislative floor this year. Legislators will discuss the bill when they convene in January—so it will get the attention it deserves, Kuehl explained. The extension gives her staff more time to craft the details of the bill, such as how to equitably tax Californians for universal health care and how workers’ compensation might be integrated into a single-payer system.

Wrong timing

No matter what the legislation, apparel-industry executives are worried that it will add one more layer of cost to their business expenses, which are already being taxed by workers’ compensation insurance rates that have skyrocketed in the last three years.

“Mandating a health care package is putting a Band-Aid on a bloody finger that is not going to stop bleeding,” said Ilse Metchek, executive director of the California Fashion Association. “There should be incentives to provide health care, but it shouldn’t be mandated.”

Lonnie Kane, president of Karen Kane Inc. in Vernon, Calif., said eventually some type of health insurance compromise to cover more workers should be made—but not now when the economy is sputtering.

“It’s one more shovel of dirt on the grave of business,” he said.

The Los Angeles Area Chamber of Commerce is not backing any of the bills. The business group believes the government should provide tax incentives to encourage more businesses to invest in health care.

“Has anyone developed a cost analysis to see how this will impact businesses, especially small ones?” asked Rusty Hammer, president of the Los Angeles Area Chamber of Commerce.

The chamber supports a broad-based health care system that is made up of private-sector providers and insurance entities as opposed to a single-payer system. It also supports health care coverage that is split 50/50.

The California Medical Association, the California Labor Federation and the AFL-CIO are backing SB2. But the medical organization does not believe it will solve all the problems in the state’s health care system.

“As a means to an end, it is one more Band-Aid,” said Dr. Marcy Zwelling-Aamot, president of the Los Angeles County Medical Association. “There is no easy solution. Quite frankly, having insurance is not the be all and end all. It doesn’t always guarantee good care.”

Kuehl, who is banking on her bill passing the Legislature next year and replacing any health care bill passed this year, believes that mounting administrative costs are causing most of the state’s health care problems.

“It is important to reform the system to redirect the more than $14 billion being wasted in administrative costs and the cost of covering the uninsured,” said the actress– turned–state senator. “My bill would cap administrative costs at 5 percent.”