The ghost of SB2

There’s still more work to do on the newly revamped AB8(Nunez/Perata). A delegation of top consumer advocates will be meeting with Speaker Nunez and other key legislators on Monday.

But it’s important to acknowledge that the proposal has improved, not just from where it is now, but from some past proposals. Many have compared this to 2003’s SB2, but this structure is significantly different, at once less less burdensome on the employers impacted, and much more comprehensive for California consumers.

Under the concept of “shared responsibility,” AB8 doesn’t just set a minimum employer contribution to health care, as some articles have suggested. It includes contributions not just from employers but from individuals, reinvested state dollars, and new federal funds. It expands and streamlines public programs. It has significant reforms on insurers, in general and in particular in the individual market. Any of these provisions, by themselves, would be a major, headline-worthy, health initiative in any other year.

Most employers will not have to make any changes under AB8. And many employers will benefit. They will now have a new, affordable option to cover their workforce, at significantly less than what they pay now, or what is available on that market. Some will be relieved to no longer have to administer a health benefit. The amount, 7.5%, is by definition as a percentage, scaled to the size of payroll, which provides additional benefit to smaller and low-wage firms. Even for those that don’t provide coverage now, they will pay a set amount and in return get a healthier, more productive workforce with less turnover and less retraining costs.

Let’s contrast that with SB2, which Health Access California strongly supported as a step forward to getting Californians coverage and security. On businesses, SB2 would have simply required that employers have to provide 80% of the cost of a premium for a standard HMO pack. Many employers do that, and many, many employers were neutral on SB2, given that it really wouldn’t have impacted them.

Under AB8, most employers also wouldn’t have to change a thing. The differences are beneficial to the employer: under AB8, the minimum contribution is 7.5%, which takes into account size of payroll. Paying the fee to have your workers covered in the statewide pool is less than the average 12-14% than employers pay on average now. They have a new affordable option to provide coverage to their workers. If the 7.5% goes up, it does so only after a public process and deliberation–rather than the status quo, which is to have the costs go up automatically as a percent of premium.

This assistance to employers is possible because of public programs and reinvested state dollars, from aggressive use of bringing in California’s fair share of federal funds, and by having the statewide purchasing pool bargain for the best rate. There are also several cost containment components of these bills, and more clearly should be done on that front. We would hope that employers, and the groups that represent them, would support many of the efforts that consumer groups have fought for in past year to help control costs.

Some employers are less inclined to provide coverage to their workers, and will oppose any health reform, no matter how litle is required. But for employers that provide coverage, and those that want to provide coverage, AB8 is not a burden, but a benefit.

Health Access California promotes quality, affordable health care for all Californians.

Leave a Comment

%d bloggers like this: