GOP Plan Asks Health Insurers to Take All Applicants

With election year politics slowing progress on major health insurance legislation, Assembly Republicans on Thursday offered a modest plan to lower the cost of insurance in hopes that more small businesses will provide it for their employees.

But the GOP lawmakers and a coalition of business representatives rejected the idea of requiring employers to provide coverage, saying such a mandate would drive many small companies out of business.

“We need to make health plans more affordable to small employers,” said Assemblywoman Bev Hansen (R-Santa Rosa). “We cannot endorse mandated health care proposals that would force small businesses to lay off their workers or take other drastic steps to afford coverage.”

The Republican bill relies on a plan to require insurance companies to accept all applicants, regardless of health condition, and to create an industrywide pool to share the costs of providing care to the chronically ill.

The measure also would limit premium increases and guarantee that businesses could renew their insurance policies.

“The insurance industry must do its fair share to solve this problem,” said Assemblyman William P. Baker (R-Danville). But Baker and Hansen said the state’s budget crisis will probably force them to jettison proposals to expand the Medi-Cal program for the poor and to allow the state to pay private insurance premiums for the working poor. Those provisions would have cost taxpayers about $2 billion, Baker said.

Without the more expensive proposals, the bill’s sponsors said, the measure would probably help about 1 million Californians obtain insurance. An estimated 5 million state residents are without health coverage.

The measure was endorsed by the National Federation of Independent Businesses, the California Chamber of Commerce and the California Restaurant Assn. The same groups have opposed several competing measures under consideration by lawmakers, including a plan sponsored by Assembly Speaker Willie Brown that would require all California businesses to provide insurance to their workers.

Brown said the Republican proposal was inadequate because it would not help enough people.

“I think they may be unrealistic,” Brown said. “You have to mandate to really cover, and it has to be employer-based.”

But others involved in the health care controversy pointed out that Brown’s ambitious proposal probably would require a tax increase to be workable, and that would seem to be impractical in an election year.