HEALTH ACCESS UPDATE

Monday, September 1, 2003

SB 2 CONFERENCE COMMITTEE:

The conference committee on SB 2 and other bills to expand health coverage is now tentatively set for the afternoon of Wednesday, September 3rd. It is likely that on that day a press event will kick off ten days of activity to win this important advance for California’s uninsured.

Letters in support of SB 2 would be appreciated by the committee as soon as possible. Please feel free to use the attached fact sheet as source material. Letters can be addressed to:

The Honorable John Burton

Senate President

State Capitol, Room 205

Sacramento, CA 95814

FAX: (916)445-4722

If possible, please CC: letters of support to Health Access California, at FAX: 916-497-0921, or E-mail at awright@health-access.org.

ATTACHED and BELOW are FACT SHEETS describing the impacts of SB 2, including the impact on health coverage and systems, and on employers and jobs.

ANTI-PROPOSITION 54 PRESS EVENT:

Also on Wednesday, a wide spectrum of the health community will hold a major press conference in opposition to Proposition 54, stating that “The Connerly Initiative is Bad Medicine.” The Los Angeles event will be on WEDNESDAY, SEPTEMBER 3RD at 10:30AM at the UCLA Medical Center, and will include the California Medical Association, American Cancer Society, and Kaiser Permanente. Please come and show your support. For more information, contact Marty Martinez at the California Pan-Ethnic Health Network at (510) 832-1160 or mmartinez@cpehn.org



FACT SHEET: Health Coverage Impacts of SB 2 (Burton)

Sept. 2, 2003

SB 2 (Burton) would extend coverage to over one million California workers and around two hundred thousand of their family members. Rather than creating new bureaucracies, SB 2 would build on the existing health care system and existing programs. More than half of all Californians—more than 18 million—already get health care through an employer.

Not only would SB 2 directly help over a million Californians be healthier and more economically secure, but it would provide benefits for all California, including the state budget, the health system we all depend on, and the economy as a whole.

SB 2 Impact on the Uninsured

SB 2 would extend coverage to 1 million-1.4 million California workers and their families. Over 4.5 million are uninsured at a given point in time. Over six million Californians are uninsured over the course of a year, out of a population of 36 million. (UCLA Center for Health Policy Research) These are families that work hard, play by the rules, pay their taxes, raise their children, yet don’t get basic health coverage.

· The bill would cover about half of uninsured workers covered by SB 2

· The bill would cover 20%-25% of uninsured children—about 200,000 children.

Millions are working but uninsured. SB 2 would extend health coverage to many who don’t have another option.

· Over 80% of the uninsured are in working families, with half of the uninsured being a worker, and over 30% being the dependent of a worker. (UCLA)

· The uninsured are not uninsured by choice. Over 85% of the uninsured are either not offered or not eligible for health insurance from their employer. (UCLA)

· Buying individual coverage is too expensive for the low- and middle-income families that are the vast majority of the uninsured. (Families USA) Coverage simply is not available for many, because of “pre-existing conditions.”

Uninsured families live sicker & die younger. SB 2 fosters healthier lives and communities.

· The uninsured all too often delay or avoid getting the care they need, including screenings and preventative care, ongoing treatments for chronic conditions, and even emergency care, resulting in severe health impacts. (American College of Physicians)

· The uninsured are more likely to die prematurely than insured patients with similar problems, for every type of ailment or problem, from emergency trauma to cancer. (Institute of Medicine)

Uninsured families are one emergency away from financial ruin. SB 2 will help economically strapped families, and prevent personal bankruptcies.

· Nearly half of all uninsured respondents reported having unpaid bills or being in debt to the facility where they received care. (Access Project/Brandeis University).

· Around 40% of uninsured families had to “change their way of life significantly” to pay medical bills. (Commonwealth Fund)

· Nearly half of all personal bankruptcies are the result of health problems or large medical bills. (NYU Law Review)

SB 2 Impact on the Currently Insured

Most workers who are now insured would simply get the security in keeping the health coverage they have, or keeping coverage when they move jobs.

· Most employers—over 80% of those with more than 10 employees—already provide health care to their workers. (Kaiser Family Foundation)

· The bill would require a fee on employers that have 20 or more employees, but those that provide basic health coverage to their workers would have the fee waived. Thus, over 97.5% of employers would not be affected, nor would their employees.

· Even in its modified form, most workers would get the security of having health coverage under SB 2. Almost 80% of California workers work for businesses with more than 20 employees. Three-quarters of workers work over 25 hours per week.

· “Job lock” would be reduced because workers would know that if they found a full-time or nearly full-time job with another employer with over 20 workers, they would still get health benefits.

· As employers are moving to shift the cost of health care onto their employees, SB 2, like the minimum wage, would help the insured maintain a basic level of benefits. This would include keeping worker’s share of premium at or below 20%.

SB 2 Impact on the State Budget

With the state budget crisis, SB 2 has the added benefit of saving the state general fund dollars:

· Between 40% and 50% of Medi-Cal enrollees and most Healthy Families enrollees are workers or their children.

· If their employers pay into the fund, the fund will pay the state share of costs for any worker or dependent that voluntarily enrolls in Medi-Cal or Healthy Families.

· Since employers would serve as a “gateway” to get already-eligible workers and their family member enrolled in public insurance programs, this will bring in Federal matching funds.

· This shift is estimated to save the state budget $700 million- $1 billion.

· The state savings is roughly equivalent to the proposed cuts to Medi-Cal that would deny eligibility and coverage to hundreds of thousands of Californians.

SB 2 Impact on the Health System and Safety Net Providers

· This reform does not make any changes to the current health care delivery system, including our system of doctors, hospitals, clinics, and emergency rooms.

· With more insured people, SB 2 will stabilize the financial health of the emergency rooms and trauma centers on which we all rely.

· Workers and their families eligible for Medi-Cal will have incentive to sign up, minimizing funding impact for safety net providers, including public hospitals and community clinics.

· Under SB 2, health care plans shall make every effort to contract with safety net providers.



FACT SHEET: Economic Impacts of SB 2 (Burton) September 2, 2003

SB 2 (Burton) would extend coverage to over one million California workers and around two hundred thousand of their family members. Rather than creating new bureaucracies, SB 2 would build on the existing health care system and existing programs. More than half of all Californians—more than 18 million—already get health care through an employer.

Not only would SB 2 directly help over a million Californians be healthier and more economically secure, but it would provide benefits for all California, including the state budget, the health system we all depend on, and the economy as a whole.

SB 2 Impact on Employers

This bill would require a fee on employers that have 20 or more employees. Those that provide basic health coverage to their workers would have the fee waived. Those that pay the fee would receive the benefit of having their workers covered through a state purchasing pool.

Only small percentage of employers would be directly impacted by the fee.

· 87.5% of employers have fewer than 20 employees and thus are exempted. (Employment Development Department)

· Over 80% of California employers with more than 10 employees already provide basic health coverage to their workers, and thus would get a full credit against the fee. (Kaiser Family Foundation)

· Overall, 97.5% of employers could have the fee waived or credited, and thus would not be directly impacted.

· Only large and medium employers that don’t provide coverage to their workers—roughly 2.5% of employers—would be directly impacted by the new requirements.

The fee is modest, and comes with the substantial benefit of an insured workforce.

· The projected cost to this 2.5% of employers would be approximately $1000-$1200 per covered life, after employee contribution and tax business deductions. This does not reflect additional productivity and other economic gains that employers would enjoy by having an insured workforce.

· For this group of larger employers that don’t provide health care to their workers, this would be only a 1-3% increase in the cost of labor, and a less than a 1% increase in their overall costs. (California Establishment Survey)

· This 2.5% of employers would get the tools to meet the requirement, and the direct benefit of an insured, healthier, more economically secure, less transient, and more productive workforce.

The 97.5% of employers that not directly impacted would get economic benefits.

· Large and medium employers which now provide health benefits would no longer be at a competitive disadvantage to those that don’t provide health benefits.

· All business would enjoy a more insured and thus more economically secure customer base. The uninsured often carry significant medical debt, making it harder to pay other bills; half of all personal bankruptcies are due to medical problems and medical bills.

· Large and medium employers would have a tool to help control health care costs, with the option of paying the fee into the state purchasing pool to buy health care.

Surveys of employers indicate that they overwhelmingly want to provide health care to their workers, but they face three barriers: cost, the administration of managing a health benefit, and the fear of agreeing to an ongoing cost that competitors may not be bearing. SB 2 gives employers the tools to overcome these barriers.

· Cost: Employers could pay the fee into a state purchasing pool, which would use the bargaining power to negotiate with insurers for better rates on health insurance that they might be able to get on the open market. This “volume discount” may have effect on lowering the price of health care overall as well.

· Administration: Employers that don’t provide health care to their workers would pay a fee, and workers would get health benefits administered by the Managed Risk Medical Insurance Board (MRMIB), which now runs the Healthy Families program, which would handle negotiating with insurers and other aspects of managing the benefit.

· Competition: Employers would also be secure that their competitors would also have to provide coverage to their workers. Like the minimum wage, it would set a standard that prevents employers that do the right thing from being undercut by competitors that don’t.

SB 2 Impact on Jobs

· More people insured and increased federal matching funds will translate in job increases in the health care sector, already an economic engine in California.

· The impact of SB 2 would be similar to an increase in the minimum wage, a broad-based requirement on all businesses, but that would only affect a small portion of actual businesses and jobs, on the low end of wages and benefits. SB 2 would essentially set a “minimum wage” for health benefits.

· Studies indicate that increases in the minimum wage have not resulted in significant job losses. As a broad-based requirement, businesses absorbed the cost. In fact, the increased spending of these low-income workers may have had a positive economic effect. (Card, 1991; Brown, 1999; Card and Krueger, 1995; Kim and Taylor, 1995)

· Hawaii’s experience with the 1974 Pre-Paid Health Care Act shows little evidence of job loss. (Thurston, Norman. “Labor Market Effects of Hawaii’s Mandatory Employer-Provided Health Insurance,” October 1997, Industrial and Labor Relations Review.)

· When asked directly, employers themselves say they would not reduce jobs. The California Establishment Survey in 2003 asked businesses and nonprofits of five or more employees how they would respond to a hypothetical five percent increase in operating costs that affected all employees in the state.

o Given a range of choices, the two most popular responses were to improve efficiency and to increase prices, totaling 59% of all establishments, and 69% of those that don’t provide health insurance to most of their employees.

o Only 2% said they would relocate outside of California. The jobs that are most likely to relocate, such as in manufacturing, are those that are most likely to already provide health insurance, and thus be unaffected by the bill. Jobs that would be affected most are those least likely to be relocated, such as in retail.

o Only 10% of those that don’t provide health care to most of their workers chose other options that would reduce employment—and this is based on increase in costs greater than those projected for SB 2, and one that did not provide the compensating benefits of SB 2.



Anthony E. Wright

Health Access

1127 11th St., #234, Sacramento, CA 95814

Ph: 916-442-2308, Fx: 916-497-0921

awright@health-access.org

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

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