Businesses Disagree on Funding for State Health Care Overhaul
The debate over overhauling California's health care system has sparked a divide between small businesses and large businesses over how to pay for a new system, the Silicon Valley/San Jose Business Journal reports (Roberts, Silicon Valley/San Jose Business Journal, 5/18).
Gov. Arnold Schwarzenegger's (R) health care reform proposal requires employers with more than 10 workers to provide health care coverage or contribute 4% of payroll into a state fund (California Healthline, 1/9).
The mandatory contribution could boost savings for large companies, especially those that already offer insurance or have employees with union wage-and-benefit agreements, because the mandatory level of spending is less than what they currently contribute to employee health insurance benefits.
However, small businesses might face a heavy burden from the governor's plan, according to the Business Journal. About 40% of small businesses in California offer health insurance, according to the National Federation of Independent Business (Silicon Valley/San Jose Business Journal, 5/18).
Assembly Speaker Fabian Núñez (D-Los Angeles) and Senate President Pro Tempore Don Perata (D-Oakland) last week released final details of their proposals to require 7.5% of payroll from businesses, sparking criticism from Schwarzenegger that it would be "impossible" to force businesses to bear the majority of the financial burden, the AP/Oakland Tribune reports.
According to the AP/Tribune, the Democrats' proposals are less stringent than SB 2, the law signed in 2003 by Gov. Gray Davis (D) that would have required large and medium-sized businesses to pay 80% of employees' health care premiums. Voters in 2004 repealed the law with the help of Schwarzenegger.
Beth Capell, a lobbyist for Health Access, said most businesses that do not provide coverage are small and pay lower wages, and would benefit more from the Democrats' mandatory contributions than provisions under SB 2.
The California Chamber of Commerce is backing opposition by small businesses against any requirement for businesses (Kurtzman, AP/Oakland Tribune, 5/20).
Meanwhile, Anmol Mahal, president of the California Medical Association, said he opposes Schwarzenegger's proposal to require physicians to contribute 2% of revenue and hospitals to contribute 4% of revenue toward expanding health care coverage. He said the mandate is "unfair to the doctors and it's an unstable revenue stream."
Mahal added that any physician contributions could worsen the physician shortage in California. California by 2015 is projected to face a shortage of 17,000 physicians, according to experts.
Mahal said, "We feel the revenue source has to be more broad-based and stable." He suggested a sales tax or income tax as alternatives to the mandatory contributions (Vesely, Oakland Tribune, 5/20).
Summaries of opinion pieces regarding California's health care reform debate appear below.
- Dean Calbreath, San Diego Union-Tribune: Gov. Schwarzenegger's health care reform "proposal -- like similar measures proposed by Democrats in the statehouse -- still has a ways to go before it matches the health care available abroad," Calbreath writes in his Union-Tribune column. "As written, Schwarzenegger's plan is a major step forward but a far cry from what's being offered in his native Austria, where government takes care of 70% of insurance costs, with a per-capita bill roughly half that of the United States'," Calbreath writes (Calbreath, San Diego Union-Tribune, 5/20).
- Daniel Weintraub, Sacramento Bee: Now that the Democrats have released the financial details of their proposals, business groups are more likely to back "either the governor's proposal or an alternative that would call for broader taxes and fees," Weintraub writes in his Bee column. Schwarzenegger "has said he will be flexible on the details in pursuit of a plan that covers everyone," Weintraub writes. "If the Democrats are as well, an agreement is well within reach," he concludes (Weintraub, Sacramento Bee, 5/20).