Guaranteed Insurance Bill Passes Assembly

Voting along party lines, Assembly Democrats on Tuesday overcame a bloc of Republican opposition and approved legislation that would guarantee health insurance for 5 million Californians who are now without it.

The $5-billion plan, deemed a “socialist” scheme by one GOP critic, would be financed by two new taxes on employers and by portions of the state’s Medi-Cal funds, tobacco tax revenue, money now spent on health care for the working poor and premiums assessed on the new program’s beneficiaries.

The bill, by Assemblyman Burt Margolin (D-Los Angeles), is one of three that the Assembly has approved in the past week which together would provide health insurance for every Californian.

One of the other bills, by Assembly Speaker Willie Brown (D-San Francisco), would require companies with more than five half-time employees to provide health insurance for their workers. The third, by Assemblyman Phillip Isenberg (D-Sacramento), would establish a state program to provide insurance for people whose medical histories make it difficult or impossible for them to obtain coverage.

It is unclear how the three bills will fare in the Senate, which approved its own catastrophic health insurance bill Tuesday, or if the measures would be signed by Republican Gov. George Deukmejian. But the bills demonstrate that the state’s crisis-ridden health-care system has moved near the top of the Assembly Democrats’ list of legislative priorities.

“All three bills raise the question of the enormous problem the state is now facing with the uninsured,” Fresno Democrat Bruce Bronzan, chairman of the Assembly Health Committee, said in an interview. “Twenty percent of the population has no insurance whatsoever. The majority of these are working people. The system is in a crisis.”

Bronzan and other Democrats maintain that the problems created by the uninsured also affect Californians who are not poor. The state’s emergency rooms are overburdened with patients who cannot afford to pay for care, they say, and the cost of such treatment is threatening to sink trauma centers that save the lives of the middle class and wealthy as well as the poor.

The legislation, even if it does not become law, is intended to focus public attention on the issue and force Republican lawmakers and Deukmejian to offer alternative proposals of their own, Bronzan said.

“None of these proposals are perfect,” Bronzan said. “They all have their problems, and they all have their flash points of controversy. But this is an area the Legislature has ignored for too long. What we’re seeing now is an attempt to move all these issues along to . . . promote the discussion and exploration of how to deal with this problem.”

Margolin’s bill, approved on a vote of 42 to 32, may have the least chance of being signed by the governor. Unlike the bills by Brown and Isenberg, Margolin’s measure proposes two tax increases for employers. Deukmejian, since taking office in 1983, has refused to approve new taxes.

Margolin said his measure is designed to complement Brown’s bill requiring most employers to provide insurance coverage for their workers. Margolin’s measure would assess a payroll tax on employers, but it would exempt any company that offers employees private insurance coverage, which could be purchased through the state at reduced rates.

The unemployed would also be covered under the plan, and their coverage would be financed by a new unemployment tax on businesses.

The legislation would also subject health insurance rates to regulation by the state insurance commissioner and limit rate increases to increases in the consumer price index.

Margolin contends that savings produced by insuring every Californian would be sufficient to prevent rate increases for other customers.

‘Hidden Tax’

“There is a tremendous hidden tax on all employers today, because the costs of health care for the uninsured are shifted to those who do purchase insurance,” Margolin said. “This bill spreads the burden equitably.”

No Republicans voted for the bill. All 32 votes against the measure were cast by GOP members.

“All you’re trying to do is find new socialist ways of sticking it to the taxpayers and the golden goose of businesses out there,” Assemblyman Gil Ferguson (R-Newport Beach) said of the bill. “How could you in good conscience subject businesses to these additional costs?”

Margolin called Ferguson’s criticism “absurd” and said business interests are beginning to support efforts to mandate employer-provided insurance coverage.

The Senate, meanwhile, passed legislation by Sen. Alan Robbins (D-Tarzana) to create a statewide, privately administered, nonprofit health insurance pool that would save consumers money by charging reduced commissions.

Robbins called Medi-Cal the insurance program of “last resort” for many Californians who cannot afford health insurance. He noted that they must “spend their money down to the point where they qualify for Medi-Cal. That’s a terrible way to qualify for health insurance.”

The Senate approved the bill on a vote of 33 to 0 and sent it to the Assembly.

Times staff writer Carl Ingram contributed to this article.