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Read Making a Killing

home / healthcare / in the media

San Bernardino County Sun (California)
Jul 25, 2004

by ANNETTE WELLS, Staff Writer

Prop. 72 aims to cancel health care act

If the majority of California voters check "No' on Proposition 72 this November, about 18 percent of the state's uninsured population would likely lose an opportunity for health insurance.

If not, starting Jan. 1, 2006, state Senate Bill 2 will take affect and employers with 50 or more workers will be required to provide health insurance to their workers or pay into a state pool so that they can obtain it.

No matter the outcome, both sides agree, millions of Californians will still be uninsured and the state will continue to grapple with the associated costs.

"In our industry, we're in tough economic times but we won't dispute if health care is an issue. In our opinion, and the businesses we represent, this is the right problem, but the wrong solution,' said Jot Condie, president of the California Restaurant Association and co-chairman of Californians Against Government Run Healthcare.

The group opposes Senate Bill 2 and led the campaign to get Proposition 72, a referendum to repeal the law, on the November ballot.

Also known as The California Insurance Act of 2003, Senate Bill 2 was signed by Gov. Gray Davis just days before he left office.

It requires companies with at least 200 employees to offer health benefits to workers and their dependents by 2006 and, companies with 50 to 199 employees to provide similar coverage to employees only by 2007.

Employers that do not comply with the law would be required to pay into a state fund that would furnish the insurance.

Companies with fewer than 50 employees will not be required to participate unless a 20percent tax credit is adopted, officials said.

Existing law does not provide a system of health-care coverage for all California residents and does not require employers to provide health-care coverage for workers.

"People who are uninsured don't get healthcare that is coordinated and certainly (Senate Bill 2) would help some of them, not all, but some of them,' said Marian Mulkey, senior program officer for the California Healthcare Foundation.

Though the nonprofit organization doesn't have a position on Senate Bill 2 or the referendum to repeal it, Mulkey said it has provided information to the Senate Bill 2 campaign.

The organization estimates the number of uninsured in California fluctuates between 4.5 million and 6 million people.

Dr. Ronald Bangasser, president of the California Medical Association and a physician at Redlands Community Hospital, said that number might be at 7million.

Senate Bill 2 would provide health insurance to about 1.3million of them, about 850,000 adults, about 300,000 children and some seniors, he said.

"This is such a significant number of the uninsured that we could make sure that they got care rather than they wait until they have gotten so sick that they need to go to the emergency room," said Bangasser. "By then, you're in the emergency room with a crisis."

He said Senate Bill 2 solved a problem, one that is unique to California. It also gives California an opportunity to reduce health-care costs and lower insurance premiums.

"We're not asking employers to cover health all by themselves," he said. "We are just saying that 80 percent of the health insurance be covered by the business and 20 percent by the employee. With the larger companies, we are asking them to cover the employee and dependents."

But opponents say the law wouldn't decrease the number of uninsured. In fact, some say it might increase that number if businesses leave the state and unemployment goes up because they want to avoid participating in Senate Bill 2.

"This is a job killer," said Cliff Cummings, owner of Toyota of San Bernardino, Hyundia and Scion.
"A lot of the small businesses can't afford this and a lot of the large business will likely leave the state. We need businesses to stay here and we need them to come in. But no business will bother if the whole package of California is so anti-business."

Cummings, who has about 250 employees, said by choice, he provides his full-time employees with health-care benefits.

Premiums are about $135 per full-time employee, he said.

"One of the things no one seems to pick up on is that all those costs some how trickles down to the consumer," he said. "If a business is doing terribly, I would have to look at a place to cut and that might be (health coverage)."

Condie estimates that 25 percent of the California Restaurant Association members will be out of business if Proposition 72 passes.

He knows of one business owner who earns about $300,000 a year.

"He's not getting rich, but he has a good family business,' he said. "If (Senate Bill 2) passes it will cost him $1.2 million. Immediately, he is out of business.'

Jerry Flanagan, a spokesman for the Foundation for Taxpayer and Consumer Rights, says it is much more costly to have a work place where workers are missing days because of illness than one where employees are insured by their employers.

"The cost of not providing health insurance could be as much as two-to-three times more than paying the premium when you consider loss of productivity," he said. "We don't take positions, but our message has been to preserve (Senate Bill 2) and crack down on the out-of-control costs of health care. We want to keep it affordable."

Condie said he is confident that Proposition 72 will not pass. If not, there will likely be a lawsuit.

Bangasser said Proposition 72 may seem confusing to voters. He said to think of it in terms of, "Do you want to keep (Senate Bill 2) as a bill?"

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