Thursday, November 4th, 2004


  • SB 2 Repealed, But Close Vote Creates Momentum for Future Reforms

Proposition 72, to ensure that employees get basic health coverage on the job and to expand such coverage to a million more workers, was defeated yesterday, by a vote of 49% to 51%, a razor-thin margin of 160,000 votes out of over 9 million cast on the ballot measure. It was the closest margin of the many initiatives on California’s November 2004 ballot.

THE IMPACT: The result of this referendum means that SB 2 (Burton), which was passed by the legislature and signed into law last year, is repealed. Large employers can (and will) scale back health coverage to their workers, or drop it altogether. Rather than take a significant step in reducing the number of uninsured, California is likely to see the number of uninsured increase, as well as other resulting problems in our health care system, such as emergency room and hospital closures. Taxpayers will still be asked to pay for the health care costs of the workers of Wal-Mart, McDonald’s, and other large corporations that don’t provide health coverage to all their workers, rather than having that money instead fund other Californians in need of health coverage.

BUILDING THE BASE FOR THE FUTURE: Despite the final outcome, health advocates should take important pride and solace in how well we did in supporting Proposition 72, and making it such a close fight. On election day, nearly half of the California electorate voted for health care reform. Health advocates can build on this base of over 4.5 million people to win the reforms we so clearly need.

The campaign educated millions of voters that many large corporations don’t provide health coverage to their workers or their families, and such corporate practices have consequences, not only for these working families, but for the taxpayer, the health care system, and society in general.

SIGNIFICANT OBSTACLES: Supporters of health care reform faced tough odds with Proposition 72:

* The opponents of health reform chose the time and the venue for this fight. SB 2 was written and passed as legislation, and was never intended to placed on the ballot, and not written with this in mind. The opponents placed this on the ballot, not the supporters.

* Due to the nature of the referendum, supporters of SB 2 had the burden of getting a “yes” vote. The general rule is that if voters are confused or undecided, they vote “no.” In the history of California ballot propositions, only one-third (35%) have passed with a “yes” vote.

* Proposition 72 had a well-funded opposition, making the odds of passage even tougher and less likely. While we started ahead in the polls, we know that a funded opposition reduces the support of a measure significantly. The opposition, with the biggest fast-food and retail corporations in the country, spent over $16 million to barely eke out their win.

* The history of health reform is littered with ballot measures and legislative efforts that ultimately went down to defeat. While voters care about health care, the subject is complex and easy for people to be scared about their own health care issues and vote for the status quo. In the early ’90s in California, Prop 166 got 32%; Prop 186 got 27%. From Earl Warren to Ken Maddy and Willie Brown in California, and from Truman to Nixon to Clinton nationally, this is the closest we have come to winning major health care reform for working people.

* By calling their coalition “Californians Against Government-Run Healthcare,” the opposition against Proposition 72 signalled that it wasn’t above using outright distortions in order to scare people. There is a honest debate to have about Proposition 72, but the opposition used many of the misleading arguments that were used to demonize health reforms in the past, even if they were very different in substance. They even used a reprise of the “Harry and Louise” commercial that helped sink the Clinton health plan–and that wasn’t the most deceptive of the commercials. That honor goes to the ad with the actress talking about how the measure would impact “her” restaurant–even when the restaurant shown only employed 12 people and thus would be exempt.

* Since the passage of SB 2, California elected a new Governor, who devoted his media star power to advance a Chamber-of-Commerce message about economic insecurity, and against regulations, taxes, and employer responsibilities like worker’s compensation insurance, all described as “job killers.” This primed the electorate to accept this label when it was used to describe Proposition 72, and gave the opponents a powerful spokesperson late in the campaign.

* Proposition 72’s requirement on employers caused some unusual allies for the restaurant and retail opponents, including some school administrators, a few social service providers, and other employers that don’t provide health coverage for all their employees. Another such opponent was newspaper publishers–which were scaling back their health benefits to their workers, and are dependent on advertsing from retailers–that had the ability to use their papers to editorialize against the proposal.

* Finally, the initiative fight was one of a long line of ballot measures, on a crowded ballot overshadowed by a historic presidential election. For a long time, it was hard to get attention from media and financial contributors on what was a historic opportunity for health reform. With “hot button” issues like stem cell research and “three strikes” reform also on the ballot, it was also hard to get voters attention to focus on this initiative, to look beyond sound bites and scare tactics. Even on the last day before voting, polls indicated that the number of undecided voters was abnormally high.

THE COALITION TO WIN: Despite all these reasons for caution, a diverse coalition of over 200 organizations came together to support Proposition 72. Having already passed the bill, it was not a fight for which we planned, but once the gauntlet was thrown, health advocates understood we needed to defend this important advance in health policy. The coalition in support of SB 2, with the leadership of the California Medical Association, the California Labor Federation, and others, came together again, and made new alliances with a range of health provider, community, religious, grassroots, labor, senior, ethnic, and constituency organizations. This was the first time that health reform was supported by all elements of the health care community: doctors, nurses, consumers, hospitals, and even some health plans.

The organizations in support of Proposition 72 worked tirelessly, working to educate their members, expand the coalition, get local endorsements, garner media attention with rallies and press conference up and down the state, distribute flyers and E-mails, sponsor and write reports and fact sheets, translate materials, donate money, make phone calls, walk door-to-door in precincts, write letters-to-the-editor, and otherwise just do all that was asked of them. Much thanks should go to this incredible coalition, and the organizations and leaders in them. Additional thanks should go to a lean campaign team that worked incredibly hard, led by Larry Grisolano and Josh Pulliam at The Strategy Group.

THE MESSAGE: The opponents spent much of their time falsely scaring those with good coverage (which are the majority of voters) that Proposition 72 would negatively impact them and their health care, when in fact it would make their coverage more secure. A lot of effort was spent to counter these scare tactics, simply explaining the concept, that Proposition 72 simply set a standard for on-the-job benefits, like the minimum wage does for pay. This analogy also helped rebut the “job killer” argument, since minimum wage increases have yet to actually result in a loss of jobs, despite ongoing dire predictions by its opponents.

The late focus on how taxpayers often have to pick up the cost of the health care of the workers of Wal-Mart and other large corporations helped cut through the clutter of the election season, and brought home the overall impact of the uninsured, and the fact that the uninsured are largely workers and their families.

FOR THE FUTURE: There is much more to say about this campaign, and what it accomplished, in terms of the message, the money, the media, and the mobilization of the masses. Health Access and other entities will provide analyses and convenings to review the lessons we learned for future fights. Next time, we will be better equipped to win, and we will.

We will win because we have to, because the health care system is unravelling. Employers are entering into a “race to the bottom” in terms of the health benefits they provide: in fact, in the past three years, there are five million more jobs in the country that no longer provide health coverage. With state and federal deficits forcing budget cuts, our public insurance programs like Medicaid and Medicare, which provide coverage for millions of children, seniors, and people with disabilities, are under attack, and will be even more so in the newly hostile environment in Washington. More Americans are uninsured, and the health care system of hospitals and clinics that we all rely on are overburdened and some are even closing.

NEXT STEPS: The status quo is not an option. The opponents of Proposition 72 kept saying “right problem, wrong solution,” but failed to ever provide their alternative. Health advocates always said that Prop 72 was only a piece of the puzzle. We need to continue with our multi-pronged efforts–to expand coverage for children, to control drug and other health care costs, to educate voters about the problems, to oppose budget cuts–as well as continue to fight to ensure that employers keep their health care responsibility to their workers.

Advocates and legislators in other states, including Massachussetts, Washington, Illinois, New York, and Maryland, are ready to go with their own health reform plans that borrow from the work done here in California. The results in California provide them with hope that this is a winnable issue, and we will support them in their efforts, with our expertise, and the lessons we have learned.

Eight years ago, HMO consumer protections were defeated at the ballot box in California, by a wider margin. Yet in four years, most of what was proposed on the ballot in 1996 had been passed by the legislature as the HMO Patient’s Bill of Rights, and were signed into law, creating the Department of Managed Health Care. Also in that time, many out-of-state advocates had taken the concepts pioneered in California and worked to pass them in dozens of states around the country. A defeat at the ballot box, especially one this close, is often not the end of a fight, but the beginning.

When we finally win quality, affordable health care for all in California and the nation, the vote on Proposition 72 will be seen as a historic moment, when people and policymakers realized that health care reform is possible and achievable. Even if we had won, the fight would not have been over. For those who support of health reform, the effort has just begun.


Anthony Wright

Executive Director

Health Access

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