SMALL BUSINESSES: Stop the Mandates!

      The "blizzard of Assembly and Senate bills" passed during the final days of the state Legislative session will mandate numerous new HMO benefits for enrollees, resulting in an "accompanying wave of crippling health rate increases" to business owners across the state. The Sacramento Bee notes that the 150 mandates already on the books have forced the state's leading insurers to raise premiums in recent months to new highs for 2000. California Democrats, consumer groups and medical malpractice lawyers argue that "businesses are better equipped to pay higher premiums than financially stretched Californians who have too little say in crucial health care decisions." But small business leaders like Martyn Hopper, California director of the National Federation of Independent Business, believe that more mandates could create "serious financial crises for companies with 50 or more employees," adding that "California is going to become a very, very expensive place to do business and it will stifle any type of creation of jobs for small business -- the ones who have created jobs across the state for the past 10 years." Business owners criticize the mandates as an "intrusion by the government into the personal relationship between employer and employee," and argue that "mandating benefits also reinforces a negative stereotype -- that employers won't do anything for employees unless forced to do so." The Bee reports that Davis administration officials "insist the governor is not inclined to sign bills that add significant costs to health insurers and California businesses." But business owners are wary. Said one Sacramento business owner, "It's such a political process. You want to believe people will do the right thing, but they might not because of political pressures" (Glover, 9/14).

HMO Arbitration Lives On
      The Orange County Register notes that while HMO reforms passed this session by the Legislature will allow patients to seek damages for care denials by health plans, they "won't change" the fact that Californians who wish to do so are, for the most part, steered into arbitration by health plan contracts, rather than to court. Newport Beach lawyer Daniel Hodes criticized the arbitration system, saying "private arbitration is more expensive, takes longer and provides fewer opportunities than the courts ... to be compensated for their losses." He added that the damages awarded "are notoriously less than those that would be awarded by juries." But advocates of the system note that it is voluntary -- "if you do not want to participate, then you can find an HMO that allows you to sue" (McDonald, 9/12).