|Implemented in this survey?|
In October 2003, pressured by the upcoming recall election, California governor Gray Davis signed into law Senate Bill 2 requiring employers in the state to either provide health insurance or to pay into a state pool to purchase the coverage. The controversial law would provide health coverage for an estimated 1 million uninsured Californians. Opponents, primarily small businesses and their representatives, contend the bill will adversely affect the state?s economy and eliminate jobs.
Thousands of California employers will soon have to provide health insurance to their employees because a bill passed by the State Legislature was signed into law - as expected - by Governor Gray Davis as his last move before the recall election on October 7th.
The bill, Senate Bill 2, is projected to give 1 million currently uninsured Californians health insurance. (Note: About 19% or 7 million Californians are uninsured compared to 15% nationally.) Often called "Pay or Play" this type of employer mandated health insurance would require employers with 50 or more employees to either provide health insurance or pay into a state pool to purchase the coverage.
If the employers choose to "play" they pay at least 80% of the premium for their employees to get a basic individual-benefit package. Businesses with 200 or more employees would also be required to provide coverage for the employee's dependents.
As all states are struggling with the growing numbers of people without insurance, the rising costs of health care and the economy this type of legislation attracts attention. Therefore, it's not surprising that news outlets both within and beyond California have covered the story and are watching to see what will happen now that Governor Davis signed it into law.
Key Components of the Legislation
SB 2 was spearheaded by Senate Majority Leader John Burton, a Democrat, who first introduced the bill in December 2002. Following are the main components of the bill that passed:
Responses For and Against the Legislation
Proponents of the bill range from physicians, to unions, to health advocacy groups. Many believe the bill is a significant step towards decreasing the number of uninsured and protecting people who are "one emergency away from financial ruin."
Not surprisingly for such a controversial topic, some health advocates who would normally support any legislation that expands health coverage believe that the legislation is merely symbolic and really doesn't change all that much; especially since the biggest coverage increase would have been in the 20-49 employee-sized companies who have been exempted unless tax subsidies are put in place. Some believe that this legislation "takes the wind out of the sail for truly comprehensive reform." Yet these are not the truly vocal opponents.
The main opponents to SB 2 are smaller businesses and their representatives.
The California Chamber of Commerce is one of the major opponents of the bill saying that the measure will cost $7.2 billion annually - 80% or $5.7 billion of this cost will be paid by employers. The Commerce believes the extra expense will send businesses and jobs out of California.
"If enacted, the bill could affect businesses across the country," said Allen Zaremberg, chief executive officer of the California Chamber of Commerce as quoted by The Wall Street Journal, 9/11/03. The article also said "He [Zaremberg] said it could put pressure on employers to increase health coverage for workers outside the state, and might affect their decisions about where to expand operations or locate new facilities."
However, the chief executive of the California Medical Association was quoted in a 9/17/03 New York Times article as saying, "The actual cost is $1.5 billion, not counting the slowing of premium increases for businesses that already provide coverage."
Many businesses are not happy and the California Chamber of Commerce says they will fight to overturn the law. They claim that the bill is "really a new tax not meeting the state's constitutional requirement of winning a two-thirds majority vote in both houses of the Legislature." Furthermore, the 9/17/03 New York Times article reports "Critics also say it violates a federal law that prevents states from regulating the health insurance provided by self-insured employers."
News reports claim that California health insurance companies' feelings about the bill are mixed. According to The Wall Street Journal, "Blue Shield of California, a non-profit insurance company that has strongly advocated universal health-care coverage, supports the measure, despite some misgivings because it puts all of the burden on employers."
It was not a surprise that Governor Gray Davis signed the legislation into law as his last public move before the recall election on October 7th. (Davis, under intense pressure from the campaign to recall him, has recently signed many bills that are considered more progressive into law.) The Wall Street Journal has reported that Arnold Schwarzenegger, at the time the article was written he was the leading Republican candidate for governor now he is Governor-elect, opposes the bill but the article points out that if he were to be elected after it is passed into law he'd have a hard time overturning it because the state legislature is controlled by Democrats.
The California Chamber of Commerce has said it will consider fighting the law in court.
To require employers to provide health insurance for uninsured Californians
|Medienpräsenz||sehr gering||sehr hoch|
While the idea behind SB 2 - expanding health insurance coverage - is not new, it is a highly controversial topic that has polarized interests across the country for years. Similarly, the
idea of an employer mandate for health insurance in a country where employer based healthcare coverage has been the norm since the early 1900s is not new but it is controversial.
Some reports predicted before SB 2 was signed into law, that when/if it becomes law businesses will go to the federal government to ask for national health coverage so that they do not continue to bear the burden. This could represent a major shift in national health politics.
|Implemented in this survey?|
SB 2 was first proposed by Senate Majority Leader John Burton in December 2002, but as previously mentioned, the idea behind expanding health coverage through employer mandates is not a new idea -
it has circulated in the health policy world for years.
Within California, SB 2 is the result of collaboration among many health advocates. Some reports indicate that the five healthcare bills proposed in the last legislative session were evaluated and that SB 2 was put forth, with the support of all the different bills' proponents, as the bill most likely to pass.
Following is an analysis of the stakeholders who have been actively involved in SB 2 and would be affected by its passage and implementation.
This health policy change is being pushed forward in the form of state legislation, SB 2. SB 2 passed the state legislature and was signed into law by Governor Gray Davis.
Now that SB 2 has been signed into law by Governor Gray Davis (the first requirement for implementation), of the other stakeholders outlined in 5.2, the employers will be responsible for a bulk
part of the implementation. The cost of the premiums will be split: 80% paid by the employers and 20% paid by the employees. The state will also bear some of the responsibility for
implementation because if the bill is to be expanded to employers with 20-49 employees they must implement tax credits to help those employers.
The state will also be responsible for regulating the employers' compliance with the legislation.
While no clear evaluation of the legislation has been proposed, it is likely that health policy analysts will actively follow the implementation of the legislation and its effects.
It is likely that if SB 2 will reach its intended objectives of providing more Californians with health insurance. However, it is also possible that the legislation could have
detrimental effects on small businesses and therefore on California's economy. The magnitude of the affect on the economy is unknown - proponents of the legislation feel it would be minimal and
opponents feel it would be substantial.
In terms of expanding health care coverage and influencing health policy debates, some believe this legislation will have a jolting effect and depending on whom you ask it could be positive or negative. A September 11, 2003 Wall Street Journal article said the following: "After the collapse of the Clinton administration's proposed health-care overhaul in the mid-1990s, policy makers thought the nation would accept only small incremental reforms. But passage of the California measure would be a wakeup call."
Carol Medlin, Insititute for Global Health, UCSF; Karin Wallestad, MPH/MBA candidate, UC-Berkeley; Sarah Weston, Institute for Global Health, UCSF