No on Healthcare ‘Remedy’

Proposition 72 – making more California employers provide healthcare coverage for workers – sounds like a terrific idea. Most Californians under age 65 who have health insurance get it through the workplace, so where better to attack the growing problem of the uninsured? The surge in uninsured patients is, after all, increasingly driven by companies that fail to provide coverage, or that demand premiums many employees can’t afford. Even many businesses have reason to support Proposition 72, because businesses that do insure their workers are currently paying higher premiums to compensate for those that don’t, dumping their employees on the public health system.

It sounds good, but it won’t work.

Companies that can move jobs out of the state would get one more reason to call the moving van; restaurants and other businesses that can’t move jobs out of California would lay off workers or hire more part-timers who don’t qualify for coverage. Some nonprofit groups and school districts say they might have to cut programs or staff.

There’s also a limit to how many people the measure would help, given the burden on business and the likely loss of jobs. Though it would force employers to pay 80% of health plan costs, many lower-paid workers would still be unable to handle their 20% share, in addition to deductibles and co-payments, despite a provision capping employee fees at 5% of pay for workers below the poverty line.

Proposition 72 was put on the ballot as a referendum on SB 2, flawed legislation that was rushed through Sacramento in late 2003. A “yes” vote means the provisions of SB 2 would be enacted, forcing businesses with 50 or more employees to either insure their workers directly or pay a fee to the state to do the job, starting either in 2006 or 2007 depending on the size of the company. A “no” vote would kill SB 2.

Proposition 72 and the legislation that prompted it fail to attack the core problem of rising healthcare costs. That will require a much broader overhaul of the nation’s healthcare system, including tough cost and utilization controls. It will require a national discussion of how to more equitably spread the cost of healthcare among individuals, businesses and government.

Chasing businesses out of the state and putting low-income employees out of work isn’t the way to fix the system. Californians should vote no on Proposition 72.