Plan Would Give Health Care to All Californians

Legislation to create a universal system of tax-supported health care for every Californian was unveiled Wednesday by a Democratic state senator and a coalition of consumer and labor groups.

The plan, the most far-reaching of several similar proposals made recently, calls for new payroll taxes on employers and their workers, a sales tax increase, and some new levies on the affluent.

In exchange, California companies would be freed from the responsibility of providing health care for their workers, and out-of-pocket medical costs to individuals would be capped at $250 a year. Most patients still would be able to choose their own doctors.

Proponents say the program would take the $50 billion that Californians already spend on health services each year and redirect that money in a more efficient way that would give everyone access to care. Critics complain that passage of the plan would mean an unprecedented and unworkable level of government interference in the private medical system.

Although the concept enjoys wide public support, according to opinion polls, the odds are against its passage this year because legislative leaders and the governor are concentrating on a separate plan that would couple expanded employer-provided health benefits with increased subsidies from the state. Health care interests are also expected to oppose the concept vigorously.

The universal care proposal, drafted by San Francisco-based Health Access and introduced in legislation by Sen. Nicholas C. Petris (D-Oakland), aims to provide insurance for more than 5 million Californians who lack it now while ending the health care cost spiral that more and more is a burden on the middle class and businesses.

It is a vicious cycle: As more people fall into the ranks of the uninsured, the cost of caring for them is shifted to paying patients through increased insurance premiums. The higher premiums deprive still more people of coverage, and the cost to the rest of the population rises anew.

“We’re looking at a system that is broken and breaking more each year,” said Judith Bell, a lobbyist for Consumers Union.

In a Los Angeles Times poll conducted in January, 72% of those interviewed said they favored comprehensive national insurance. On average, the respondents said they would be willing to pay an additional $106 a year in taxes for universal insurance and $154 to pay for long-term nursing home care. A Gallup Poll of Californians released Wednesday found similar results, with 83% supporting the concept of a government-run insurance program.

The Health Access plan would virtually end the indemnity insurance business, where insurance companies reimburse their customers directly for their out-of-pocket costs. But prepaid medical plans and health maintenance organizations, under which groups of doctors and hospitals agree to serve patients at negotiated rates, would continue to exist and could flourish.

The difference is that the government would be the insurer. In return for higher taxes--a 10% payroll tax on employers, a 1% payroll tax on workers, and a sales tax increase of 1% or less--the state would guarantee every citizen a generous set of benefits. Those would include preventive medicine, dental care for children and long-term care for the aged. A state commission with massive bargaining power would contract with private doctors and hospitals to provide the care.

Poor people now using the state Medi-Cal system and the elderly who are enrolled in Medicare would also be part of the program.

But Petris and the Health Access coalition may have to take a political back seat to Gov. George Deukmejian, Democratic Assembly Speaker Willie Brown of San Francisco and Senate Republican leader Ken Maddy of Fresno. Those three are working on two plans that would require most or all California employers to provide insurance for their workers while subsidizing the costs for small businesses and companies with low profits.

Another proposal, by Assemblyman Burt Margolin (D-Los Angeles), would impose an 8% payroll tax on any employer that failed to provide insurance. The state would use money raised through the tax to buy coverage for those without it.

The Petris bill, which may become a ballot initiative if it fails in the Legislature, would offer greater coverage to more people than any of the other plans.

“This is the only major bill that would provide universal and comprehensive health care for all Californians,” said Karen Coker, a lobbyist for the County Supervisors Assn. of California.

But doctors, hospitals and the insurance industry can be counted on to oppose the measure.

“We believe in universal access, but this would be a monolithic, government-dominated system,” said Duane Dauner, president of the Californian Assn. of Hospitals and Health Systems. “We prefer a more pluralistic approach.”