L.A. Chamber of Commerce backs Schwarzenegger health program

SACRAMENTO -- The Los Angeles Chamber of Commerce on Monday endorsed Gov. Arnold Schwarzenegger’s healthcare proposal, including its requirement that employers chip in for workers’ medical care. The chamber is the first business group to directly back that controversial part of the governor’s plan.

The group, which has about 1,600 businesses as members, broke publicly from the California Chamber of Commerce’s position that any mandated health contribution requirement would be an excessive burden on business.

Leaders of the Los Angeles chamber said they favored Schwarzenegger’s proposal because, unlike the Democrats’ alternative, it would spread the responsibility of paying for healthcare for most Californians among different groups, including hospitals, government and individuals. The Democrats’ plan places the onus on employers to expand coverage for workers.

“We believe everyone should be part of the solution, not just business,” said David Fleming, chairman of the Los Angeles chamber. “Everybody has to have skin in this game.”

Schwarzenegger has proposed that all businesses with 10 or more employees be required to spend the equivalent of 4% of their payroll on healthcare. Those that don’t spend the required amount would have to pay that percentage into a state-run fund that would secure insurance for the workers.

Most members of the chamber already provide health insurance to their workers, officials said, so Schwarzenegger’s plan would not require any additional sacrifice.

The governor’s proposal has been faulted by consumer groups and Democrats as being too lenient on businesses because it exempts smaller firms, which make up 80% of California businesses.

Also, Schwarzenegger’s 4% spending threshold is well below the 13.8% of payroll spent by the average company that currently provides health insurance for workers, according to an analysis that Rand Corp., a nonprofit think tank, has provided to state officials.

The governor is planning to present his plan to the special legislative session he called earlier this month. So far, although Schwarzenegger has persuaded several business coalitions to endorse his broad concepts for what healthcare reform should look like, none have embraced the details as the Los Angeles chamber did Monday.

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jordan.rau@latimes.com