Businesses Disagree on Funding for State Health Care Overhaul

[CAL/AAEM News Service]

Businesses Disagree on Funding for State Health Care Overhaul

Source: California Healthline (http://www.californiahealthline.org)
Date: May 21, 2007


The debate over overhauling California's health care system has sparked a divide between
small businesses and large businesses over how to pay for a new system, the Silicon
Valley/San Jose Business Journal reports (Roberts, Silicon Valley/San Jose Business
Journal, 5/18). 

Gov. Arnold Schwarzenegger's (R) health care reform proposal requires employers with more
than 10 workers to provide health care coverage or contribute 4% of payroll into a state
fund (California Healthline, 1/9). 

The mandatory contribution could boost savings for large companies, especially those that
already offer insurance or have employees with union wage-and-benefit agreements, because
the mandatory level of spending is less than what they currently contribute to employee
health insurance benefits. 

However, small businesses might face a heavy burden from the governor's plan, according
to the Business Journal. About 40% of small businesses in California offer health
insurance, according to the National Federation of Independent Business (Silicon
Valley/San Jose Business Journal, 5/18). 

Comparisons to SB 2 
Assembly Speaker Fabian Núñez (D-Los Angeles) and Senate President Pro Tempore Don Perata
(D-Oakland) last week released final details of their proposals to require 7.5% of
payroll from businesses, sparking criticism from Schwarzenegger that it would be
"impossible" to force businesses to bear the majority of the financial burden, the
AP/Oakland Tribune reports. 

According to the AP/Tribune, the Democrats' proposals are less stringent than SB 2, the
law signed in 2003 by Gov. Gray Davis (D) that would have required large and medium-sized
businesses to pay 80% of employees' health care premiums. Voters in 2004 repealed the law
with the help of Schwarzenegger. 

Beth Capell, a lobbyist for Health Access, said most businesses that do not provide
coverage are small and pay lower wages, and would benefit more from the Democrats'
mandatory contributions than provisions under SB 2. 

The California Chamber of Commerce is backing opposition by small businesses against any
requirement for businesses (Kurtzman, AP/Oakland Tribune, 5/20).

Physician Contributions
Meanwhile, Anmol Mahal, president of the California Medical Association, said he opposes
Schwarzenegger's proposal to require physicians to contribute 2% of revenue and hospitals
to contribute 4% of revenue toward expanding health care coverage. He said the mandate is
"unfair to the doctors and it's an unstable revenue stream." 

Mahal added that any physician contributions could worsen the physician shortage in
California. California by 2015 is projected to face a shortage of 17,000 physicians,
according to experts. 

Mahal said, "We feel the revenue source has to be more broad-based and stable." He
suggested a sales tax or income tax as alternatives to the mandatory contributions
(Vesely, Oakland Tribune, 5/20).

Opinion Pieces
Summaries of opinion pieces regarding California's health care reform debate appear
below. 

Dean Calbreath, San Diego Union-Tribune: Gov. Schwarzenegger's health care reform
"proposal -- like similar measures proposed by Democrats in the statehouse -- still has a
ways to go before it matches the health care available abroad," Calbreath writes in his
Union-Tribune column. "As written, Schwarzenegger's plan is a major step forward but a
far cry from what's being offered in his native Austria, where government takes care of
70% of insurance costs, with a per-capita bill roughly half that of the United States',"
Calbreath writes (Calbreath, San Diego Union-Tribune, 5/20). 
Daniel Weintraub, Sacramento Bee: Now that the Democrats have released the financial
details of their proposals, business groups are more likely to back "either the
governor's proposal or an alternative that would call for broader taxes and fees,"
Weintraub writes in his Bee column. Schwarzenegger "has said he will be flexible on the
details in pursuit of a plan that covers everyone," Weintraub writes. "If the Democrats
are as well, an agreement is well within reach," he concludes (Weintraub, Sacramento Bee,
5/20).

For more information, please visit: 
http://www.californiahealthline.org/articles/2007/5/21/Businesses-Disagree-on-Funding-for-State-Health-Care-Overhaul.aspx



Cyrus Shahpar & Brian Potts 
Managing Editors, CAL/AAEM News Service
University of California, Irvine

The CAL/AAEM Archives are available at: http://maillists.uci.edu/mailman/public/calaaem/



 
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