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Blazing a Trail for Health Care

Groundbreaking moves in California and Maine may inspire more states to build up the political momentum to cover their own uninsured.

September 15, 2003|Charles Ornstein and Sue Fox | Times Staff Writers

The passage of a landmark California bill that would require all but the smallest businesses to provide health insurance to their workers may give new traction to sputtering efforts in other states to expand health coverage, experts said Sunday.

The California measure, along with a new Maine law, offers hope for those seeking to reduce the number of uninsured Americans, now estimated at more than 40 million.

Federal lawmakers have largely shied away from expanding health-care coverage since the colossal failure of the Clinton administration's health-care reform plan of 1993-94. That has left state and local governments bearing many of the growing costs of caring for the uninsured and devising solutions of their own.

"We see little evidence from Washington that the current administration and current Congress are going to do anything about the huge number of uninsured people in the country," said E. Richard Brown, director of the UCLA Center for Health Policy Research, who consulted with drafters of the California bill. "I think there's growing sentiment that states need to do something."

In June, Maine Gov. John E. Baldacci, a Democrat, signed a law that aims to provide health insurance to all state residents by 2009. It also seeks to rein in medical costs by establishing voluntary price caps for providers, hospitals and insurers. Lawmakers in several states, including Maryland, Illinois, New Mexico and Wisconsin, are conducting studies or drafting legislation to expand health coverage that could be considered as early as next year.

Hawaii is so far the only state requiring businesses to provide health insurance for most employees working more than 20 hours a week. Massachusetts and Oregon lawmakers enacted similar laws but repealed them before they took effect because of strong opposition from businesses.

The California legislation -- supported by doctors and labor unions and opposed by business groups -- still awaits Gov. Gray Davis' signature and could face court challenges. Even if it passes muster, it would not begin to take effect until 2006.

Still, the leader of the Universal Health Care Action Network called the California bill "very, very positive."

"What we're seeing now is state leadership and creativity," said Dr. Ken Frisof, the group's national director. "California and Maine and some other states are beginning to show that it's, in fact, possible to get political momentum in this area."

The California legislation, approved early Saturday, would require employers to either purchase private health-care policies for workers or pay into a statewide pool that would purchase insurance on their behalf. The requirement would apply to employers with 200 or more workers on Jan. 1, 2006. Businesses with 50 to 199 workers would have until 2007 to comply, and employers with fewer than 20 workers would be exempt.

Employers with 20 to 49 workers would be exempt until the state provided them with a tax credit subsidy to help offset the insurance cost. Supporters believe the legislation would provide health coverage to 1 million of the 6.3 million uninsured Californians.

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One of Several Bills

The bill was one of several in the Legislature to expand health coverage. The plans differed based on who would administer and pay for care -- government or private business. The legislation that passed relies on businesses to fund the additional coverage.

By contrast, Sen. Sheila Kuehl (D-Santa Monica) sponsored a bill that would have created a state-run system to provide coverage for all residents. Kuehl had proposed paying for it with existing health-care dollars, along with a payroll tax. Her measure passed the Senate but was not considered by the Assembly.

Expanding health coverage is to Democrats what tax cuts are to Republicans -- a core party concern. Universal health coverage generally refers to providing all people enough insurance for doctor visits and hospital stays. Some support a government health system, similar to Canada's and Britain's, while others favor a mix of public and private programs. Still others argue that the government's role should be limited to providing tax credits for people to spend on private health insurance.

Frisof said California may prove to be a unique case because Democratic lawmakers rushed to pass bills before the Oct. 7 gubernatorial recall election, which could eject the Democratic governor from office.

Universal health care has been a hard sell. In November, voters in Oregon trounced a universal health-care initiative on the ballot, and Massachusetts voters defeated a similar measure in 2000. Years earlier, lawmakers in both states had killed laws that would have required employers to provide insurance.

The latest roadblock is money. Most states are now struggling with budget deficits and rising Medicaid enrollment. And many states are considering dropping low-income people from the public health insurance program to help balance their budgets.

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