Calif. Senator Wants Businesses, Workers to Share in Covering Uninsured

Staking out the middle ground in the burgeoning health care debate, Senate President Pro Tem Don Perata outlined a plan to cover 4.2 million uninsured Californians, mostly the working poor.

Perata’s plan would require both employers and employees who do not now have health insurance to start paying for it.

Gov. Arnold Schwarzenegger, who is developing a health care reform proposal, has opposed making employers pay in the past.

But Health and Human Services Agency Secretary Kim Belshe said Tuesday that he does not rule out the idea if it is part of a comprehensive health care reform of “shared responsibility” — a term that Perata also used — between employers, individuals, government, health providers and health plans.

The plan put forward by Perata, D-Oakland, falls short of the Democratic goal of universal coverage, and other Democrats are expected to go further. Assembly Speaker Fabian Nunez, D-Los Angeles, is working on a proposal to cover every Californian, although he has not yet said how he would do it.

Sen. Sheila Kuehl, D-Los Angeles, plans to reintroduce her bill to create a single payer system, although the governor vetoed it this year. Given the governor’s opposition, Perata said it made more sense to offer a compromise proposal for now.

“For those people who want universal coverage, this doesn’t get that done,” Perata said. But he said with the governor now focused on health care, the Legislature had a “once in a generation opportunity to do something significant, important and long-lasting.”

Kuehl, who is the incoming chair of the Senate Health Committee, said she supported Perata’s plan as a first step toward eventually covering everyone under a single-payer system.

Perata’s proposal relies heavily on gaining more federal funding through Medi-Cal and the Healthy Families program, something he said was more likely to happen now that there is a Democratic Congress.

It does not require any general fund money and therefore could pass with a majority vote, which Democrats could provide by themselves.

But Republicans criticized the idea of forcing employers to provide health insurance or pay a percentage of their payroll to fund the new state program. Small businesses also mobilized, saying it would put them out of business.

Betty Jo Toccoli, president of the California Small Business Association, said her members worry that they will be forced to cover their workers’ families. While she said 86 percent pay at least 70 percent of their employees’ health premiums, only 15 percent insure dependents.

“It’s strictly a matter of cost,” she said. “They just can’t afford $1,200, $1,500 a month for a family plan.”

Health insurers also questioned a requirement to cover all applicants no matter how sick they were and asked whether health plans would be compensated for the risk they would be taking.

Perata is calling on the state’s Managed Risk Medical Insurance Board to operate an insurance pool and use its leverage to negotiate with health plans to lower costs. The board also would set benefit levels.

The poorest working people would be allowed to buy into Medi-Cal’s managed care plans. To do that, however, the federal government would have to expand the program to include families earning three times as much as the current maximum. For a family of three, that would mean increasing it to $48,000 a year.

Working people who could not prove they had insurance would have to pay more on their income tax returns.