California Groups Prepare For Universal Health Battles

By

California insurance groups are gearing up to shape implementation of S.B. 2, the states “universal health” bill.

At press time, insurance lobbyists were expecting Gov. Gray Davis to sign the bill before the Oct. 7 recall election.

If the bill takes effect as written, California employers with at least 200 employees will have to provide family health coverage for eligible employees starting in 2006.

Employers with 50 to 199 workers would have to provide worker-only coverage starting in 2007. Employers with 20 to 49 workers would have to provide worker-only coverage in 2007 if the state offers subsidized coverage.

Affected employers that did not provide health coverage would have to pay a health coverage fee. The California Managed Risk Medical Insurance Board would then buy coverage for eligible workers.

The bill would not affect employers with fewer than 20 employees, and it would not limit the cost of health coverage or medical services.

The California Medical Association, Sacramento, Calif., helped write the bill, and a variety of consumer groups and labor groups support it.

Most California employer groups, the Health Insurance Association of America, Washington, and the National Association of Insurance and Financial Advisors-California, Sacramento, oppose the bill, but CAHU and the California Association of Health Plans, Sacramento, are neutral.

“We support, in general, the concept of universal health care coverage,” says CAHP President Steven Tough. But S.B. 2 “is a skeletal construction.” The structure of the MRMIB health insurance purchasing pool is particularly unclear, he adds.

Steve Lindsay, CAHUs lobbyist, also criticizes the haziness of the S.B. 2 purchasing pool provisions.

Supporters say S.B. 2 will cost only $1.5 billion and help up to 1 million state residents get health coverage, but the Employment Policies Institute, Washington, a pro-business think tank, says implementing S.B. 2 could lead to layoffs, wage cuts and benefits cuts that would cost California workers $11 billion.

Even if Davis signs S.B. 2, opponents might block implementation by turning to the federal Employee Retirement Income Security Act, a law that forbids states from regulating employee benefits.

Shifts in the political climate also could affect implementation. Arnold Schwarzenegger, the top Republican candidate for governor, opposes the bill. “We simply cant afford to add another tax, another mandate on business,” he says.


Reproduced from National Underwriter Life & Health/Financial Services Edition, October 3, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.