San Francisco Health Access Program Update

• Abstract
• Characteristics of this policy
• Purpose and process analysis
• Expected outcome
• References

Abstract

In July 2007, San Francisco launched a program designed to provide its uninsured residents with universal access to health care. More than 17,000 uninsured residents have enrolled, but the program has faced an expected challenge to its financing structure: In November 2007, a court ruled that the plan?s employer contribution mandate violates federal law prohibiting state or local governments from regulating employer benefits. The city is appealing the decision and is expected to win on appeal.

Neue Entwicklungen

In July 2007, San Francisco became the first city in the U.S. to implement a program, the San Francisco Health Access Plan, designed to provide its 82,000 uninsured residents with universal access to health care (see HPM report "San Francisco Health Access Plan"). The program, now known as Healthy San Francisco, began by enrolling several hundred patients at two Chinatown clinics in July. It has since expanded to 27 participating clinics and added roughly 2,000 participants per month; more than 17,000 participants were enrolled in the voluntary program by the first week of April 2008.

Providing coverage for low-income population groups

Healthy San Francisco began by targeting the most vulnerable segment of the uninsured population: residents whose income was at or below 100% of the Federal Poverty Level (FPL), or roughly $10,000 per person year (100% of FPL is set at $21,000 for a family of four) were the first to be eligible to enroll. By January 2008, eligibility was expanded to include San Francisco residents whose income was at or below 300% of the FPL. The plan will continue to be phased in gradually through early 2009.

Mandatory employer contribution challenged by business association

As of January 2008, following the Ordinance that established Healthy San Francisco, San Francisco businesses employing 20 or more people (50 or more if the business is a nonprofit) are required to either provide coverage for their employees or pay a fee to the city to finance the program. Those that choose to provide coverage must meet a spending minimum set by the city: roughly $200 per employee per month for smaller companies, and $300 per employee per month in larger companies. (The limit is comparable to the city's spending per enrollee, roughly $200 per participant per month.) Businesses that opt not to provide coverage at the minimum required rate must pay fees ranging from $1.17 to $1.76 per person per hour, with the exact rate determined by the size of the business.

Before the employer spending mandate went into effect in January, the 900-member Golden Gate Restaurant Association successfully sued the city of San Francisco to overturn the employer spending mandate, which covers about a quarter of Healthy San Francisco's $200 million annual cost. Despite this, in a usual measure, the program was allowed by a panel of district court judges to implement the spending requirement, pending an appeal of the original ruling. Further details of the litigation appear below.

Innovationsgrad	traditionell		innovativ
Kontroversität	unumstritten		kontrovers
Strukturelle Wirkung	marginal		fundamental
Medienpräsenz	sehr gering		sehr hoch
Übertragbarkeit	sehr systemabhängig		systemneutral
current    previous

At the time that it was unveiled in 2005, the San Francisco Health Access Program was considered highly innovative. The program will ultimately expand health care access to all of the city's 82,000 uninsured residents, including those ineligible for government programs, such as Medi-Cal and Medicare, and was designed to make not just primary but also preventive care accessible and affordable for the city's uninsured.

Purpose and process analysis

Current Process Stages

	Idee	Pilotprojekt	Strategiepapier	Gesetzgebung	Umsetzung	Evaluation	Veränderung/Richtungswechsel
Implemented in this survey?

Initiators of idea/main actors

• Regierung

• Bürgergesellschaft

• Wissenschaft

• Privatwirtschaft, privater Sektor

Stakeholder positions

In a State of the City speech he delivered in October 2005, San Francisco Mayor Gavin Newsom pledged to provide all of San Francisco's 82,000 uninsured residents with access to health services. In February 2006, Mayor Newsom appointed a 37-member Universal Healthcare Council (UHC) to develop the plan. The UHC released a report with its recommendations for the San Francisco Health Access Program in June 2006. The SF HAP (now called Healthy San Francisco) was incorporated into Supervisor Tom Ammiano's Worker Health Care Security Ordinance, which was unanimously approved by the city's Board of Supervisors in July 2006. The Ordinance called for the new plan to be implemented with the mandatory employer contribution. (Employer fees are also a feature of California Governor Arnold Schwarzenegger's plan to cover all Californians, which was recently defeated in the state Senate.)

Healthy San Francisco was strongly supported by both Mayor Newsom, Supervisor Ammiano, and the rest of the city's Board of Supervisors. The plan's strongest critics have been the small-business employers-particularly restaurant owners-who have been required to provide a minimum of coverage to their employees or pay fees to the city. 

Actors and positions

Regierung
Mayor Gavin Newsom	sehr unterstützend		stark dagegen
San Francisco Board of Supervisors	sehr unterstützend		stark dagegen
Supervisor Tom Ammiano	sehr unterstützend		stark dagegen
Bürgergesellschaft
Labor unions	sehr unterstützend		stark dagegen
Wissenschaft
Universal Healthcare Council	sehr unterstützend		stark dagegen
Privatwirtschaft, privater Sektor
Small business owners and associations	sehr unterstützend		stark dagegen
current    previous

Actors and influence

Regierung
Mayor Gavin Newsom	sehr groß		kein
San Francisco Board of Supervisors	sehr groß		kein
Supervisor Tom Ammiano	sehr groß		kein
Bürgergesellschaft
Labor unions	sehr groß		kein
Wissenschaft
Universal Healthcare Council	sehr groß		kein
Privatwirtschaft, privater Sektor
Small business owners and associations	sehr groß		kein
current    previous

Positions and Influences at a glance

Adoption and implementation

Healthy San Francisco, which is not health insurance, provides each participant with a "medical home," a primary care provider, and access to specialty care, urgent and emergency care, mental health care, substance abuse services, laboratory, inpatient hospitalization, radiology, and pharmaceuticals. Enrollees can only receive care within the city of San Francisco and must be residents of San Francisco to receive care. The majority of participants' "medical homes" are the city's Department of Public Health Clinics; a minority of participants call one of a network of Consortium Clinics their "medical home." The plan's emphasis on preventive care was designed with the aim of cutting down on uninsured visits to emergency rooms.   

Healthy San Francisco is administered through the San Francisco Department of Public Health's San Francisco Health Plan, which already provides services to about 50,000 Medi-Cal recipients and low-income residents through a network of clinics, hospitals, and physicians. The expected cost of the program, $200 million per year (for providing care to all 82,000 uninsured), is covered in part by a fraction of the $104 million per year the city previously paid to cover emergency care and other services provided to the uninsured. The remaining cost is covered through state funds, individual premiums and copayments, and mandatory employer contributions. In 2007, the program received an award of $73 million from the state health department, to be apportioned over three years. Enrollees pay quarterly participant fees and point of service fees at rates determined by their level of income. Employers who opt not to cover their employees at the minimum level mandated by the city are required to pay fees as described above.  

Small businesses fear high financial burden

No sooner was the program's financing structure unveiled than small businesses, including members of the very vocal restaurant association, began to argue that they bore an undue share of financial responsibility for the program. Restaurant and other small business owners maintained that the fee required by the ordinance would force them to lay off employees, raise prices, cut salaries, or go out of business. Restaurant owners in particular argued that the law would raise their operating costs by five percent, significantly cutting already tight profit margins.

Does the employer contribution mandate violate federal law?

Restaurant owners instead called for a quarter-cent local sales tax to take the place of the proposed fees and spending mandates in the plan. In anticipation of Healthy San Francisco's launch in July 2007, the 900-member Golden Gate Restaurant Association sued the city in November 2006, seeking an injunction against the employer contribution mandate. Lawyers for the association argued that under a 1974 federal law, the Employment Retirement Security Act (ERISA), the privilege of regulating employee benefits belongs exclusively to the federal government; the San Francisco program, they argued, constitutes illegal local government regulation of benefits. A similar suit had effectively thwarted plans to implement a Maryland state universal health insurance plan in July 2006. 

Members of the UHC pointed out that the San Francisco plan was designed to circumvent this problem by giving businesses the option of providing coverage or paying a fee to support the city program; the program also does not regulate benefits, but rather sets a minimum that must be spent on them.

The suit against the city went before a judge in November 2007; it was widely viewed as a test case of state and local government's power to mandate that employers provide or subsidize health care coverage. California state legislators were particularly interested in the case's outcome, as Governor Schwarzenegger's proposal for statewide universal coverage, unveiled in early 2007, was also designed to be partially funded by mandatory employer contributions.

District court overturns employer mandate...

In late December 2007, federal district court Judge Jeffrey White overturned Healthy San Francisco's employer fee requirement, arguing that because the program required employers to provide health coverage, it was in fact in conflict with federal law. In response, lawyers for the city sought an emergency stay from the Ninth U.S. Circuit Court of Appeals in San Francisco, in order for the program to expand, as scheduled, to cover residents making up to three times the FPL in January 2008.

...but further implementation of plan allowed until final ruling of Court of Appeals

The Court denied an emergency stay, but a week later, a panel of judges ruled that San Francisco could enforce the law while it appeals Judge White's decision on the employer funding provision. The allowance was unusual, but the panel of judges said that city lawyers' arguments against Judge White's ruling were strong, and that "avoidable human suffering, illness and possibly death" could result if the program were not allowed to expand as planned.

High demand for program

In the meanwhile, participating clinics say they have been overwhelmed by demand for the voluntary program, stating that it has been far more popular than anticipated. An average of roughly 2,000 eligible uninsured have enrolled in the voluntary program each month since its debut in July 2007. Ultimately, the program will cover uninsured residents who earn up to five times the FPL.

Monitoring and evaluation

So far, the San Francisco Health Department has been releasing monthly statistics on the number of enrollees, their clinic use, and neighborhoods of origination. The city is also requiring employers to file documentation that they are providing coverage for employees who work ten hours a week or more and meeting the minimum health care spending requirement per employee.

Expected outcome

Expanding its number of enrollees as scheduled, Healthy San Francisco estimates it will have 46,000 uninsured residents enrolled by June 2008 and will be fully implemented by early 2009. Restaurants across the city, meanwhile, have added surcharges to their menus-along with notes to explain the situation to customers-in order to cover the cost of fees or private plans for their employees. The three judge panel of the Ninth U.S. Circuit Court of Appeals, which permitted the plan to implement employer spending mandates and fees in January, anticipated that the city will win its appeal against Judge White's decision, and that Healthy San Francisco will be financed as planned. If so, the city plan may prove a viable model for other cities seeking to provide universal access to health care to similar populations of uninsured.

Impact of this policy

Qualität	kaum Einfluss		starker Einfluss
Gerechtigkeit	System weniger gerecht		System gerechter
Kosteneffizienz	sehr gering		sehr hoch
current    previous

References

Sources of Information

Community Clinic Voice. San Francisco Health Access Program an Immediate Hit. August 16, 2007. www.communityclinicvoice.org/webx/.eea8965.

Egelko, Bob. "Ruling lets S.F. enforce its law on health care; Employers must help cover workers even as city appeals". San Francisco Chronicle, January 10, 2008, p. A1.

Knight, Heather, and Bob Egelko. "S.F. requests stay so its plan can go into effect; City wants coverage to expand next week as it appeals ruling barring employer fee". San Francisco Chronicle, December 28, 2007.

Department of Public Health. Healthy San Francisco: History, Program Stats and News. www.healthysanfrancisco.org.

Author/s and/or contributors to this survey

Conis, Elena and Carol Medlin

Empfohlene Zitierweise für diesen Online-Artikel:

Conis, Elena and Carol Medlin. "San Francisco Health Access Program Update". Health Policy Monitor, April 2008. Available at http://www.hpm.org/survey/us/d11/3