New California Battle: Health Care for All?

Even before the state Supreme Court decides the fate of last year’s auto-insurance initiative, economic forces are stockpiling political arms for possible ballot-box warfare over a larger insurance issue--health-care coverage for every citizen of California.

In Sacramento, the immediate concern is insurance for 5.2 million Californians who fall between the cracks, uncovered by their employers and ineligible for government benefits. But a consumer coalition, fueled by recent successes with the initiative process, is expanding the debate by propounding a ballot measure that would guarantee all 28 million Californians state-provided health insurance.

Since 1916, when progressive Gov. Hiram Johnson proposed a universal health-insurance plan, Californians have periodically debated the issue, with doctors, hospitals and other health-care providers fighting successfully against what they call “socialized medicine.”

There is general agreement on the principle that every Californian is entitled to first-class health care without extreme economic hardship. From that point, the debate centers on the proper role of government in converting principle to reality.

Should government guarantee health care to everyone as a basic human right or should its role be restricted to the aged, poor, blind and disabled? Should government force employers to insure all employees and their dependents? Should any public program include long-term care, prescriptions, eyeglasses and dentistry?

Questions like these are now before the Legislature because the media have dramatized the fiscal plight of the uninsured, medical costs are rising much faster than inflation, and hard-pressed counties no longer wish to be the health provider of last resort.

Most of all, the heat comes from a San Francisco-based coalition called Health Access, which is developing a universal health-insurance initiative for the 1990 ballot. This 17-organization coalition is led by Lois Salisbury and Maryann O’Sullivan, attorneys with Public Advocates, a law firm specializing in pro-consumer class-action lawsuits.

Under a draft of the initiative, the state would provide health insurance to every Californian “regardless of age, sex, health status or ability to pay.” Every citizen would choose between a variety of health plans that limit choice of doctors and hospitals. A fee-for-service alternative would also be offered. Canada uses a similar system, as does the state for 600,000 active and retired employees and their families.

The literally $64-billion question: How would this system be financed? The sponsors propose that the state go after funds now spent for the Medicare and Medi-Cal programs and also levy a payroll tax of undetermined size.

For firms now providing coverage, the payroll tax presumably would be offset by elimination of health-insurance costs. Employers without health plans would feel the pinch.

The proposal is rife with problems that must be resolved: Will Uncle Sam be willing to turn over all Medicare payments to the state? Will quality of care be adversely affected by pressure to keep costs down? Will California become a magnet for the nation’s chronically ill? The coalition is using a bill by Assemblyman Burt Margolin (D-Los Angeles) as the vehicle for hearings designed to answer these and many other questions about the proposal.

In theory, the proposal wouldn’t eliminate the free-enterprise marketplace because the state would only be paying insurance premiums, not hiring doctors and running hospitals. But government and business would have an interest in keeping costs down, and that could intensify the squeeze the state applied to hospitals and physicians seven years ago in adopting health-care reforms.

The California Medical Assn., which represents most California doctors, is attempting to defuse the Health Access plan by pushing a bill by Assembly Speaker Willie Brown (D-San Francisco), which would take a big bite out of the problem. Under the Brown bill, every business with five or more employees would be required to provide health insurance for workers (but not their dependents).

That would place another 3 million Californians under the umbrella, leaving 2.2 million uncovered. These include dependents of the 3 million, those who work in very small firms and self-employed persons.

Jay D. Michael, the association’s chief lobbyist, says his organization and its allies may place the plan on the ballot in 1990 if the Legislature rejects the Brown bill. The main opposition is from small businesses, which would be forced to pay billions of dollars to insure their employees. (Economists estimate annual health costs at between $2,000 and $2,500 per Californian.)

That could produce a head-to-head conflict between rival health proposals reminiscent of last year’s free-for-all over auto insurance. The doctors are betting that California voters won’t buy a revolutionary plan if they can choose a less disruptive alternative that will solve 60% of the problem.

If the ballot-box warfare materializes, Californians will find that feelings will run far deeper than was the case with auto insurance, which dealt primarily with dollars. The health-care controversy involves such basic values as freedom of individuals from fear of economic disaster, freedom of employers and employees to negotiate health benefits, and freedom of doctors and hospitals to operate without government restrictions.