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OVERVIEW
OF HEALTHCARE PROPOSALS
July 24, 2006 Governor Arnold
Schwarzenegger held a health summit with
stakeholders representing almost everyone
involved in the health insurance issue. The
Governor listened to comments from the
participants and heard most say we are at or
near a crisis, which will only get worse if
something is not done. The Governor was told
that he needed to take a leadership role and
bring forth a comprehensive solution to the
problem.
As a result, the Governor has made his number
one issue for 2007 getting coverage for all
Californians.
In January 2007, he shocked a lot of
people with a $12 billion proposal to cover 4.8
million people. The proposal includes
prevention, universal coverage, cost
containment, and shared responsibility for
employers, employees, government, doctors and
hospitals. There would be a 4% charge on
employers with more than 10 employees who do not
provide health insurance for their employees, a
4% charge on hospitals and a 2% charge on
physicians. It would also include an individual
mandate where individuals would be required to
purchase their own health insurance. A
purchasing pool would be set up through the
Managed Risk Medical Insurance Board (MRMIB),
which would guarantee issuance of coverage and
subsidies would be set up for people below 250%
of the Federal poverty level.
There are a number of other proposals that
have been put forth. Sheila Kuehl has
introduced SB 840: The California Universal
Health Care Act. This is what is commonly
called a single payer proposal, which in effect
has the government collecting money and paying
providers for services. This is similar to the
way Canada and England deal with health
insurance. This would be paid for with an 8%
employer tax, a 3% individual tax and government
subsidies.
Senator Perata and Speaker Nunez have
recently merged bills (SB 48 and AB 8) with
Speaker Nunez’ bill, (AB 8) being the vehicle
that will be moved forward. It sets up a
purchasing pool for individuals that are
employed and would require all employers to
spend at least 7.5% for their employees’ health
cost. Employers who provide health insurance to
their employees and spend 7.5% would not be
required to pay any additional cost.
Individuals are not required to purchase
coverage but if they do they would be required
to pick up some of the cost for their coverage.
Senate Republicans have introduced a number of
bills with no mandates or charges. They
primarily use market forces like tax credits and
increased flexibility in health plan design.
I have briefly summarized the proposals omitting
many specifics. I would like to briefly give
the Small Business California perspective: We
feel that something must be done to address the
rising cost of health insurance. Double-digit
increases are not sustainable and if not dealt
with, will force even those small employers to
drop coverage.
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We believe coverage must be universal with guaranteed
issuance of coverage regardless of an individual’s
health condition. We support an individual mandate with
shared responsibility to pay for coverage.
The most important issue of all is cost
containment. Everything must be on the table.
Prevention, transparency, payment to providers by
outcomes instead of procedures, expanded authority of
nurses, health information technology, development of a
basic medical plan, chronic disease management,
purchasing pools for small businesses and individuals,
and the leveraging of state funds for federal dollars,
just to name a few ideas.
Small Business California has taken the position
that we will not support requiring anyone to pay into a
broken system, however, if cost can be reduced due to
cost containment measures and increases can be at or
near inflation rates, Small Business California would
support a requirement that small businesses pay
something. Small Business California does not support a
charge of 7.5% and believes the 4% put forth by the
Governor is more reasonable.
The legislative session will end in September so
there will be a lot of activity over the next few months
on this issue. We urge small businesses around the
state to contact their Senator, Assemblyman and the
Governor and put forth their views.
Scott Hauge
Founder, Small Business California
Our Position on Healthcare
Small Business California is taking a multi
pronged approach to this problem. We are
closely reviewing the major bills that have been
presented by the legislature and making sure the
small business voice is being heard.
The most significant of these bills is SB 48 (Perata)
where employers would have options on how best
to meet the needs of their employees.
Shelia Kuhl’s SB 840 which would create a
Canadian style health system called single
payer. AB 1 (Laird and Dymally) and AB 420
(Wolk) which increase health insurance for
California's children. SB 51 (Ducheny)
which supports establishing the San Diego Health
Care Connection Demonstration Project and SB 25
(Maldonaldo) which supports H.S.A. Tax
deductions.
SB – Cal is working to
provide free health choices to the working
uninsured. We are partnering with the
Volunteers in Medical Institute (www.vimi.org).
This organization helps communities set up
clinics using retired doctors, nurses and
dentist. This involves no government money and
currently there are 41 clinics in the United
States. SB – Cal is working to set up clinics
in San Diego, Orange County and San Francisco
and hope to find other interested areas.
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