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NEWS RELEASE
Sep 29, 2003


CONTACT: Jerry Flanagan - 415-633-1320

Governor Davis Urged to Sign Senate Bill 2 Before Recall Election

FTCR called upon Governor Davis to pledge his support for HMO premium regulation, price controls on doctors and hospitals
SAN FRANCISCO -- Governor Gray Davis has yet to sign legislation on his desk that would provide health care benefits for nearly 1 million working Californians who do not have access to care.

The Davis Administration has expressed its concern with the cost of the legislation, something that could be fixed in the 2-year interim before the bill will take effect, according to the Foundation for Taxpayer and Consumer Rights (FTCR):

"For good reason the legislature has delayed the bill's implementation until 2006: appropriate cost controls on the amounts that hospitals, physicians, and insurers can charge consumers and small businesses have not yet been established," wrote Jerry Flanagan of FTCR today in a letter to Governor Davis. "However, now that there is a mandate for employers to provide health care, we have a deadline to make the system affordable. That's good news."

Under the proposed "pay or play" plan, employers with 20 or more employees must either provide health care benefits directly to workers or pay a fee for the worker to receive care from a state run health insurance purchasing pool. The bill's implementation date has been delayed until 2007 for medium sized employers, 2006 for large employers and will not require employers with 20-49 employees to participate unless a 20% tax credit is adopted first. The bill does not provide protections for consumers on the amount of out-of-pocket charges they will be required to pay in order to access medical services.

FTCR called upon Governor Davis to pledge his support for HMO premium regulation, price controls on doctors and hospitals, and a state-run insurance pool open to all Californians, whether employed or not, by 2006, the date of the plan's phase-in.

While urging the Governor to sign the bill, FTCR expressed concern over the appearance that Governor Davis is delaying his decision on SB 2 in order to encourage more contributions from special interest groups to help him oppose the recall:

"Organized labor, physicians, insurers and hospitals that support the measure are locked in a war of campaign contributions with those who oppose the measure; namely, employers," wrote Flanagan. "This appearance of cash-register politics is sure to further embitter voters fed up with the role of special interest money in the state's political process."

Letter To Governor Davis:

Monday, September 29, 2003

Governor Gray Davis
State Capitol
Sacramento, California

RE: Sign Senate Bill 2

Gray Davis:

We are writing to you on behalf of the millions of Californians who do not have health care benefits or whose health insurance is threatened by the volatility of the health care system.

Their voices are often muted by the cacophony of special interest appeals, but their message is clear: sign SB 2.

For good reason the legislature has delayed the bill's implementation until 2006: appropriate cost controls on the amounts that hospitals, physicians, and insurers can charge consumers and small businesses have not yet been established.

However, now that there is a mandate for employers to provide health care, we have a deadline to make the system affordable. That's good news.

There are a number of other important reasons to sign SB 2:

- Hawaii has had a positive experience with a similar "pay or play" system. When costs became too great in the late 1990's, that state took effective action by allowing the Insurance Commissioner to deny unfair and excessive rate increases.
- The bill has the potential of significantly increasing access to health care because more than 80% of California's uninsured are working families.
- The bill will save California taxpayers millions of dollars because health care will be provided preventatively rather than later in an Emergency Room when the patient's condition is critical and care is much more expensive.
- By insuring more people, the cost of care will come down for all consumers because risk is spread more widely.
- The new plan offers a comprehensive benefits package, including prescription drugs for all eligible workers and dependents.
- The proposed plan could be expanded in the future by allowing all Californians to have access to the state purchasing pool.
- The proposal will level the playing field for employers by taking away the competitive advantage of those employers that currently do not offer health benefits to their workers.

This is an issue that must be resolved before the recall election. Organized labor, physicians, insurers and hospitals that support the measure are locked in a war of campaign contributions with those who oppose the measure; namely, employers. This appearance of cash-register politics is sure to further embitter voters fed up with the role of special interest money in the state's political process.

Signing this long overdue legislation is your chance to show true leadership. The citizens of California will measure the depth of your vision by whether or not you commit to stabilizing our health care system by taking the profiteers to task.

Sincerely,

Jerry Flanagan
Consumer Advocate
(415) 633-1320

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The Foundation for Taxpayer and Consumer Rights is a non-profit and non-partisan consumer advocacy organization. For more information visit us on the web at www.consumerwatchdog.org or www.calhealthconsensus.org





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