State Senate Committee OKs Health Insurance Measure

Despite warnings that small businesses would be hurt, a Senate committee passed legislation Wednesday to require most California companies to provide health insurance for their employees.

The measure by Assembly Speaker Willie Brown (D-San Francisco), which has already cleared the Assembly, would make insurance available for 2.7 million California workers who now pay for their own health care or rely on taxpayers to pick up the bill.

A key Assembly committee, meanwhile, passed a landmark measure that would transform the state’s injured worker compensation system, increasing benefits while scaling back the rights of workers under the program. Brown hinted that the two issues may soon be linked.

Brown’s health insurance bill enjoyed wide support at Wednesday’s hearing of the Senate Industrial Relations Committee, a Democrat-dominated panel that approved the measure on a 5-2 vote and sent it to the Senate Insurance, Claims and Corporations Committee. Among those testifying on behalf of the bill were representatives of doctors, hospitals, labor unions, local governments and the clergy.

“Society has an obligation to make sure every human being is able to live in dignity,” said William Wood, executive director of the California Catholic Conference. “We’re all in this together.”

But opponents of the measure, including manufacturers, restaurant owners, and hotel and motel operators, said businesses should not be forced to bear an expense that all taxpayers ought to share.

“This is society’s problem,” said Martyn Hopper, director of the National Federation of Independent Businesses. “Unfortunately, what the Speaker’s bill does is shift society’s burden onto one particular segment of society.”

Business Argument

Hopper and other industry lobbyists argued that the additional cost to businesses--which could be more than $1,000 a month for a company with a dozen workers--would slow creation of new businesses, hamper expansion and result in more unemployment.

Brown’s bill, even if passed by the Legislature and signed by Gov. George Deukmejian, could not take effect without action by Congress, which has barred states from requiring employer-paid health insurance. Congress exempted Hawaii, which has a program after which Brown’s bill is patterned.

The bill would apply to businesses with at least five employees working more than 20 hours a week, which covers most California companies. Such firms would have to pay 75% of the cost of a minimum health insurance policy for workers with at least three months on the job.

The policy would cover hospital care for 120 days a year, surgical benefits, laboratory services, maternity benefits and mental health services, including 25 outpatient visits a year. Brown estimated that the policy would cost $85 a month, while employer representatives suggested the cost might be closer to $150.

Deukmejian told reporters Wednesday that he supports providing insurance for those currently without coverage but views Brown’s approach as too onerous on small businesses.

“I think that we’re going to try to work to find a solution without the burden falling too heavily on one particular group,” he said.

Brown hinted that he may tie the fate of his bill to the ongoing negotiations over the state’s injured worker program, which is one of the most expensive in the country yet provides some of lowest benefits to workers.

The Assembly Ways and Means Committee approved a bill Wednesday that would increase the maximum benefit for injured workers from $224 a week to about $511 by 1993. The measure, which is still the subject of negotiations, is supported by a business and insurance coalition and parts of organized labor.