* Special Edition *
Thursday, April 28th, 2005


  • Universal Single-Payer Bill Passes Senate Health
  • Children’s Coverage Passes Key Committees
  • “Individual Mandate” Proposal Fails in Assembly Health Committee With Broad Opposition
  • San Francisco County Considers Expansion of Employer-Based Coverage, Similar to Prop 72

On the eve of another national “Cover the Uninsured Week,” health care reform seems far from the national political discussion. However, the debate on expanding health coverage is alive and well in California, with mulitple bills, large and small, stirring debate and discussion in the legislature. Other initiatives are moving forward in counties around the state, from an employer-based expansion in San Francisco to new child health insurance expansions in many counties. Below are descriptions of these state and local discussions.

Cover the Uninsured Week will take place on May 1-8. A description of the week and its activities is available at:

Most of the CTUW events in California are based in and around San Diego, but there are other activities around the state as well. For a list of these and other events of interest to health advocates in a busy month of May, visit the online Health and Budget Advocacy Calendar, at:


SB840 (Kuehl), the California Health Insurance Reliability Act (CHIRA) passed out of Senate Health Committee 7-4 on Wednesday, with all the Democrats on the committee voting for the bill, and all the Republicans voting against it. The bill passed the Senate Banking, Finance, and Insurance Committee earlier this month. The bill will need to go through the Senate Appropriations Committee, and then through the full Senate before June 3, 2005.

SB840 creates a universal, single-payer health care system for all Californians. The financing for such a system is expected to included in a second bill to be introduced by Senator Sheila Kuehl (D). SB 840 will remain the policy bill with all of the benefits, governance structure, transitional procedures, delivery of care details, consumer advocacy and protections and structures for efficiencies and savings and sustainability spelled out.

Funding for CHIRA will be developed in the Senate Revenue and Taxation Committee, chaired by Senator Mike Machado, with a first hearing planned for June 2005. The committee will analyze different funding plans, including those considered by the Lewin Group in their two cost/benefit studies. A fiscal bill based on feedback from these hearings will be introduced in January 2006.

In Senate Health Committee, Senator Kuehl introduced the bill, and while she referenced the studies indicating the economic efficiencies of a single-payer system, she wanted to focus on the health benefits, given the focus of the committee. She referenced the Institute of Medicine study that declared that the U.S. suffered from an “epidemic of substandard care.” She introduced Paul Heineken, MD, Associate Chief of Staff for Ambulatory Care at the SFVAMC, clinical professor of medicine at UCSF, and a member of the CA Physicians’ Alliance. He stated that his “experiences working as a VA physician has made it clear to me that there are several fundamental principles of single payer that are essential to the delivery of the best quality care possible.” He added that as a single-payer system, “in published studies of medical care quality, VA care exceeds that of the private sector in 70% of indices, and is equal in all the others. Most importantly, the VA lacks the perverse incentives built into the current payment system. Unbridled fee-for-service causes overuse of procedures, while abusive HMOs lead to too few.”

To further point out the problems with the current health system, another witness told of her personal story of being insured, but facing a medical emergency with her baby, faced $90,000 in bills, leading her to file Chapter 13 bankruptcy, and undergo “emotional trauma on top of medical tragedy.” Organizational supporters that lined up in support included Health Access California, Health Care for All, Congress of California Seniors, AARP, American Medical Student Association, National Association of Social Workers, Jericho, Friends Committee on Legislation, Planned Parenthood, SEIU, Latino Issues Forum, National Organization of Women, and many others.

The opposition was led by the Chamber of Commerce, which “rejected the premise that it is best to have government-run health care.” The representative disparaged the ability of “elected officials” and a “huge bureaucracy” to run a health care system, and he feared that they would be “pressured to shift the cost away from individuals and onto those that don’t vote, such as businesses.” He also said that of his time around the Capitol, “I can’t think of an instance of scaling back benefits, particularly in this area,” citing that this would be a problem with controlling costs. (Kuehl rebutted later, citing worker’s comp changes made recently.) A lobbyist for life and health insurance companies said they “disagree on the premise that the government can do a better job than the private sector.” Other opposition came from insurers, optometrists, chiropracters, and other providers.

Senator Wes Chesbro (D) asked the Chamber what he thought of the current health system, and the Chamber lobbyist stated “we are willing to concede, given that there are 6.7 million uninsured, that the market is not operating at an optimal level, or close to opitmal,” but he thought a single-payer system would provide “a different set of problems.” Senator Chesbro followed up that if employers that provide coverage are paying for those that don’t, and to remedy this, that they can choose between requiring employers to provide coverage, or having the government do it.

Senator George Runner (R) pointed out that some of the uninsured are eligible for public insurance programs but are not enrolled, or are offered employer-based coverage but don’t take it up. From his point of view, in finding a solution for the remaining, smaller number of uninsured, “it doesn’t make a lot of sense to change the whole system” for all of those that have coverage. Senator Deborah Ortiz (D), the chair of the Senate Health Committee and a co-author of the bill, said that while the legislature has been “struggling to provide access to these programs” that Runner mentioned, we need the SB840 to show the goal, to say “this is where we push.”


The flagship “Healthy Kids” legislation, AB 772 (Chan/Frommer) and SB 437 (Escutia/Alquist), to cover all children in California, successfully made it out of the key policy committees in April, including Assembly Health, Senate Health, and Senate Banking, Finance and Insurance. Each of those committees heard testimony from child advocates, religious leaders and people of faith, business representatives, and health advocates in support of the effort. These measures, which do not have financing in the bills at this time, are set for Appropriations Committees, before going for respective floor votes.

A press conference earlier this month gave a sense of the messages used to support this effort. The description below is taken from the Californians for Healthy Kids campaign website, at:

AB 772 author Assemblymember Chan and SB 437 co-author Senator Alquist briefed the press on April 13th. Representatives from the staffs of SB 437 author Senator Escutia and AB 772 co-author Assemblymember Frommer were also present. Assemblymember Chan called for support for AB 772/SB 437 as a “common-sense approach to cover all children.” Asm. Chan outlined the bills’ provisions to build upon the current Healthy Families and Medi-cal programs, streamline the application process, and expand coverage to uninsured children. Senator Alquist, principal co-author of SB 437, continued the call to action by noting that “providing all children with health insurance is the least we can do in a civilized society.” Sen. Alquist highlighted the unique opportunity to build upon successful local Children’s Health Initiative programs.

Cheyanne Cook, from the Los Angeles Chamber of Commerce, reinforced this point by saying that the L.A. Chamber has worked closely with the L.A. Children’s Health Initiative because “covering children leads to a stronger economy and a more productive workforce.” Scott Hauge of Small Business California concurred that “business knows that this is the right thing to do for kids and that it makes good business sense.”

Alicia Lozano, joined by fellow PICO representative Lucretia Hopkins, stated that “as people of faith, we need to look after the most vulnerable members of our society, the children.” Nancy Marquez, a 19 year-old college student, spoke powerfully about her own personal experience living without insurance in California. She described the worry of knowing she couldn’t afford to get sick, and the pain of going without needed care. Living under the grace of God, she said, is not sufficient insurance for 800,000 California children. Ted Lempert, President of Children Now and representative of the 100% Campaign, closed the conference by offering that “insuring all children is a common goal in California which can be achieved legislatively this year.”


A proposal to impose a “individual mandate” on uninsured Californians, AB1670 (Nation/Richman), failed in Assembly Health Committee. It got only two votes in support, five votes in opposition, and the rest of the committee not voting. Opposed by consumer and constituency groups, health plans, and many others, this bill would have required Californians to prove they have basic health insurance when filing income taxes each year. If they did not have coverage, they would be charged for a health plan with limited benefits and a $5,000 deductible.
Assemblymen Joe Nation (D) and Keith Richman (R) presented this proposal as a team, after citing a range of statistics showing how the current system is broken, and how the status quo is not an option. They correctly stated that most of the uninsured children are eligible for public insurance programs, which could be streamlined to get more of them enrolled. They went on to cite that half of the non-elderly uninsured adults are in the 18-34 years old category, and called them “young invincibles” that don’t want coverage.

Their main witness was Dana Goldman, Rand Corp. director of health economics, who gave an overview of the problems in the health care system. Repeating what many health experts state, he cited that the “best practice in health insurance” was when people came together to “share risk,” either through Medi-Cal or Medicare, or through employers, which attract a broad enough range of workers that the risk is spread around. He also cited the many problems in the individual market, where Californians could be denied for pre-existing conditions, or simply find the coverage unaffordable.

He acknowledged that his next statements were more contested, when he suggested that health coverage didn’t have a major impact on health status or outcomes, and so many of the benefits provided by coverage were not essential. In his view, health insurance is simply a means for financial security, “just like other insurance products,” and so a high-deductible plan could protect people from bankrtupcy with less cost. The California Chamber of Commerce and the California Restaurant Association supported the bill in concept. (Letters in support came from the California Healthcare Institute and the Insure the Uninsured Project.)

Opponents against the proposal included Health Access, the California Labor Federation, the Foundation for Taxpayer and Consumer Rights, the California Association of Health Underwriters, Kaiser Permanente, Blue Shield, Health Net, Latino Coalition for a Healthy California, California Nurses Association, California Immigrant Welfare Collaborative, Greenlining Institute, and many other consumer, labor, constituency, and health provider organizations.

Health Access California indicated that the problem was not that the uninsured didn’t want care, and that contrary to the earlier statements, younger people take up coverage when offered as much as any other age group, but they are more likely to work at lower wage jobs that don’t provide health coverage. Also, high-deductible plans are of dubious value: studies show that people with high deductibles fail to get the necessary and appropriate care, including not taking medicines or go to the doctor for chronic conditions. Health Access also cited a recent Harvard study that showed a huge increase in bankruptcies due to medical bills, and most of those financial problems were insured, often people with such high deductible plans.

The California Labor Federation raised concerns that such a individual mandate would allow and encourage employers to drop on-the-job health benefits, especially for low-wage workers. Individual workers would then find it hard to fend for themselves in the individual marketplace. The Foundation for Taxpayer and Consumer Rights said it didn’t make sense to mandate a product that is “unaffordable and unavailable,” and cited the money wasted in the profit and administration of the insurance companies. Health plan representatives were also in opposition, citing that the purchasing pools envisioned in the bill were unworkable, and would create more expensive health products, rather than the cheaper plans the authors envisioned. Blue Shield, which cited their support of previous reforms that “spread the burden” on government, employers, and individuals, opposed this measure for “simply shifting the burden onto individuals.”

Numerous legislators on the panel commended the authors for thinking about the health care issue, but almost all raised concerns with the punitive nature of the mandate, how its was structured, and how it would impact lower-income families, as well as traditional employer-based coverage. In the end, only Republican Assemblymember Greg Aghazarian, Vice-Chair of the Committee, voted with Assemblyman Richman in support of the measure. All other Assemblymembers, both Democrats and Republicans, either didn’t vote or voted no.

In closing, Assemblymember Nation said, “My fear, frankly, is that we will continue to say no, no, no to a number of bills, many with promise, and not do anything positive for the health care system.” To date, the fear has not been realized: the legislature is still actively considering many other proposals, all of which expand health coverage. Many of the proposals have consumer advocacy support because they use the proven methods of bringing people together to share risk and responsibility, either through public insurance programs, or through the worksite, through employer-based coverage. The legislature did pass SB2 in the last legislative session, and there seems to be momentum to act on health reform this session.


The continuing momentum for health reform seems partially fueled by the close vote for Proposition 72 last November, which would have provided employees of large companies health coverage, but that narrowly lost by less than 1% of the vote. In many counties around the state, including San Francisco, Proposition 72 got strong support.

On April 20, the San Francisco Board of Supervisors held a special hearing on a proposal by Supervisor Tom Ammiano to require employers (with more than 20 workers or more than $1 million in annual gross receipts) to provide health coverage to their full-time workers or pay a mitigation fee to cover the cost of city health services. Ammiano’s proposal, which has not yet been drafted as legislation, envisions a system similar to Proposition 72, with a Knox-Keene standard for minimum coverage and employers being required to cover at least 80% of the cost of the premium.

Unlike Prop 72, however, Ammiano is not proposing to require dependent coverage, since San Francisco already has near-universal coverage of children through its San Francisco Health Plan. Representatives from the SF Department of Public Health, SF Health Plan and Office of the Legislative Analyst presented data showing that: the city spends $24 million a year providing health care to uninsured workers through its public hospital and clinics; some 12% of San Francisco employers with more than 20 workers did not provide health coverage to their workers; some 56,000 employees would be helped by a policy requiring firms with 20 or more workers to provide health coverage; and, such a policy would save San Francisco taxpayers $11 million a year.

San Francisco is currently facing a deficit of at least $113 million and is contemplating deep cuts to health and human services, including the closure of full or partial closure of several public health clinics. During the hearing, Supervisor Daly said he wanted to be sure the $11 million saved would be used to reduce the need for cuts to public health.

Dozens of local activists and supporters spoke in support of the proposal, including the San Francisco Labor Council, SEIU, Health Care for All, Health Access, SF Organizing Project (the local PICO affiliate), Chinese Progressive Association, Planned Parenthood Golden Gate and Planning for Elders.

The SF Human Services Network, which represents private non-profits that contract with the city, also voiced support for the concept, although they also expressed concerns and want to make sure the final legislation does not hurt their members. A representative from the Council of District Merchants was the only speaker in opposition.

Supervisor Elsbernd suggested that the proposal be heard in the Small Business Commission. However, the Supervisor, whose district is home to City College, SF State and UCSF, also indicated an interest in making coverage available to part-time workers who were also students, by including the number of credits being taken along with the number of hours worked. In closing, Supervisor Ammiano said that he considered the proposal a “reasonable, incremental step toward universal coverage.” Ammiano said he intended to move forward regardless of the opposition he expects to encounter from business.

Thanks to Jessica Rothhaar of Health Access for this report from San Francisco.

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