FOR IMMEDIATE RELEASE: October 05, 2003

Governor Davis Signs Law Expanding Health Care for Working Californians

California Medical Association Media Relations
Peter Warren—310-809-4381
Ron Lopp—916-501-7699
Karen Nikos—213-630-1139

LOS ANGELES—Oct. 5—Governor Davis today signed Senate Bill 2, historic legislation that extends health coverage to one million California workers. The measure takes on added significance with the increase of uninsured nationwide to 43.6 million, according to U.S. Census data released this week.

The law, which would require employers with 50 or more employees to provide insurance for workers, was sponsored by the Californian Medical Association, and backed by a coalition that included organized labor, some employers, Health Access California and various consumer representatives. 

 “This is a historic moment,” said Jack Lewin, M.D., CEO and executive vice president of the California Medical Assn.  “This law will save lives and money by providing one million Californians with health coverage and access to medical care.  It is a dramatic step in solving not only our state’s uninsured problem but also in dealing with the crisis  in our emergency rooms.  It should serve as a model for the rest of the nation.”

California has more than 6 million uninsured, about 19% of the population.  Many are forced to use hospital emergency departments as their doctor’s office.

The health coalition supporting the bill released a poll Thursday showing the measure is backed by 63% of Californians.  The survey of 800 voters was conducted by the Feldman Group, Inc. from Sept. 9 to 11, 2003 and has a 3.5 percent +/- margin of error. (The Feldman Group contact is 202-467-4200.)  The poll results summary and other details are available at http://www.calphys.org/html/bb395.asp .)

The poll showed approval by significant margins from virtually every demographic, including men and women, Democrats, Republicans and Independents, Anglos and Latinos, voters over and under 50, and voters in different regions of the state.

“The poll confirms the breadth and depth of support for expanding health care coverage, particularly for families who are working. In a common-sense fashion, SB 2 builds on the existing system where more than 16 million Californians already get health coverage through their employer, and it gives more security for those workers,” said Anthony Wright, executive director of Health Access California, a statewide health care consumer coalition of 200 organizations.

The bill is coauthored by Sen. John Burton, president pro temp of the Senate, and Sen. Jackie Speier.  For details on SB2 and its costs go to: http://www.calphys.org/html/bb395.asp .

Facts about The Health Care for Working Families Act (SB2)

Moderate and Reasonable
The Health Care for Working Families Act (SB2) is a moderate and reasonable step that affects 5% of employers in California, while providing health coverage for 1 million uninsured.

Fair to Business; Saves Money, Lives
SB2 is fair to business because it levels the playing field between prudent employers who provide insurance and their freeloading competitors who do not.

The bill requires businesses with 200 or more employees to cover them and dependants by 2006. Businesses with 50 to 199 employees must cover employees only by 2007. Most of these employers already provide insurance, and that is why they back the bill .

The law will save all of us money, and save lives.  Premiums are inflated 15% to cover care for the uninsured. Medi-Cal would save hundreds of millions because many working poor would now have insurance.  Most critically, Californians would be healthier and fewer would crowd of emergency rooms now used by the uninsured as a doctor’s office.

Fears Exaggerated
The fears of employer exit are overblown. The majority of businesses who do not provide coverage are in service industries including hotels, car washes, fast food outlets; none of these would leave the state and they could cover the cost with tiny increases in charges.

Our economy is hurt because we are doing nothing about more than 6 million uninsured who seek inappropriate and expensive health care at emergency rooms, and handicap our economy and classrooms with avoidable serious illness and untreated chronic disease.

Business Should Join Us In Seeking Tax Incentives
Rather than criticize, the Chamber of Commerce should see this as a model for the nation and spend the 2 years before this takes effect working with our large Congressional delegation to lobby for tax incentives to further reduce the costs as a national priority.
Our nation needs to deal with the tragic impacts of having 43.6 million uninsured.

The Act
Co-sponsored by CMA and the California Labor Federation.  Supporters include Blue Shield, Safeway, Kaiser-Permanente, Genentech, CHA and others.  It would require larger employers to provide their employees with basic health coverage or pay into a state purchasing pool that would provide coverage for uninsured workers.

• Low Cost—Individual premiums for such basic coverage cost about $200 a month.  Employees would pay 20% of cost and 40% would be covered by federal and state tax deductions, bringing the cost per employee to about $80 a month, less than $1,000 a year.
• Exemptions—Businesses with 20 to 49 employees would be exempt unless the legislature passes another law authorizing an additional 20% health-care tax credit for these businesses. If a tax credit is approved, these businesses would be required to provide coverage in 2007.
• Savings—CMA estimates that these “real costs” will total about $1.3 billion for businesses who do not currently provide coverage. But there are significant savings for others. First, this program is expected to provide at least that much in savings in lower health insurance premiums for those providing coverage now. Health insurers estimate that 15% of premiums pays for the cost of providing care to the uninsured, while lack of access drives up the cost of care for the uninsured. This legislation is also expected to provide $620 million in savings to the state’s Medi-Cal system. The bill would also reduce Workers Compensation costs because workers would no longer need to game the Workers Comp system to get health care. And finally, there would be savings to employers who provide family coverage because dependent spouses now would be covered by their own employers.
• Help ERs—Reduces inappropriate use of emergency rooms and the workers’ comp system by workers who lack health insurance.