Democrats’ Health Care Reform Plan Advances in California
The Senate Health Committee on Wednesday approved legislation by Assembly Speaker Fabian Núñez (D-Los Angeles) and Senate President Pro Tempore Don Perata (D-Oakland) to overhaul California's health care system, the Sacramento Bee reports (Yamamura, Sacramento Bee, 7/12).
AB 8 would require employers to provide health care coverage or contribute at least 7.5% of payroll toward a state fund to provide coverage. Workers would be required to contribute 4.5% of income to help pay for coverage (Chorneau/Davies, San Francisco Chronicle, 7/12).
Under the plan, families whose incomes do not exceed 300% of the federal poverty level would be eligible for subsidized coverage. Health care costs for this group of residents would be capped at 5% of income.
The bill is projected to expand health care coverage to 3.4 million additional Californians (Sacramento Bee, 7/12).
The committee took up the measure the same week as two studies were released that found conflicting results regarding the economic impact of the Democrats' bill.
A report released Wednesday by the UC-Berkeley Center for Labor Research and Education concluded that the proposal would have "no measurable negative" effect on job creation in California (San Francisco Chronicle, 7/12).
Ken Jacobs, chair of the center, said, "It is possible to substantially increase health coverage in California without negatively impacting employment." He added, "In fact, expanding health coverage can have a positive impact on the California economy."
The study found that initial costs of the plan would be offset by:
- Future decreases in premiums paid by employers that already provide coverage; and
- The infusion of billions of dollars in expanded federal funds (Herdt, Ventura County Star, 7/12).
Meanwhile, a study released Monday by the National Federation of Independent Business concluded that the measure would hurt the bottom line of small-business owners and could result in the loss of almost 250,000 jobs within five years of taking effect (San Francisco Chronicle, 7/12).
Núñez said he would rather propose a single-payer health care system but noted that Gov. Arnold Schwarzenegger's (R) pro-business agenda limits its likelihood of passing. He added, "There are too many problems in our health care system to wait to come up with the perfect solution that everyone could support" (Feder Ostrov/Harmon, San Jose Mercury News, 7/11).
Sen. Sheila Kuehl (D-Los Angeles), chair of the committee and author of legislation to create a single-payer system, said she voted for AB 8 because it is better than Gov. Schwarzenegger's reform proposal (Sacramento Bee, 7/12).
Schwarzenegger said, "My favorite proposal is our proposal" because it distributes the cost of expanding coverage among employers, government and health care providers. He added, "I think it's important that we spread out the responsibility" (San Francisco Chronicle, 7/12).
Alan Zaremberg, president of the California Chamber of Commerce, said, "AB 8 simply imposes an illegal tax on employers who can't afford to purchase health insurance" (San Jose Mercury News, 7/11).
Assembly Minority Leader Mike Villines (R-Clovis), said the bill is "well intentioned," but "at the end of the day, we will not be able to sustain it, we will not be able to afford it, and we're going to be making a false promise to people" (San Francisco Chronicle, 7/12).
Villines added, "I believe the governor would veto this bill. It's very clear [AB 8] goes way past anything he's ever said he would do ... I think he would be compelled to veto it, and I'm sure of that."
A spokesperson for Schwarzenegger said that the governor has not taken a position on AB 8 (Myers, "Capital Notes," KQED, 7/11).
The measure now goes to the Senate Appropriations Committee for consideration. If approved by that committee, the bill heads to the full Senate.
The measure then would require Assembly approval before it reaches Schwarzenegger's desk (San Jose Mercury News, 7/11).
The governor and the legislative leaders before the end of the summer are expected to begin negotiations to seek compromise legislation for health care reform in California (San Francisco Chronicle, 7/12).
Capital Public Radio's "KXJZ News" on Thursday reported on the bill. The segment includes comments from:
- Núñez; and
- Lorraine Salazar, a restaurant owner in the Central Valley (Russ, "KXJZ News," Capital Public Radio, 7/12).
A transcript and audio of the segment are available online. This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.