Wilson Scraps Try for State Insurance Aid

Gov. Pete Wilson said Wednesday that the state’s bleak budget picture has forced him to rule out any serious attempt this year to provide health insurance for 6 million Californians who lack even basic medical coverage.

Wilson, in an address to the California Medical Assn. and later speaking to reporters, said the state doesn’t have the money to finance a key element of most of the proposed plans--subsidies for small businesses that would be required to provide insurance for their workers.

He said that even the one plan he finds encouraging--a proposal drafted by the medical association and introduced by Senate Republican Leader Ken Maddy--is not feasible this year because it would rely on the sales tax, which Wilson wants to increase just to keep the state’s current programs running for another year.

The Republican governor told the doctors’ group that he eventually will need the health care industry’s help in fashioning a plan to expand access to insurance and limit the annual increase in medical costs, which he said are the “obsession” of virtually every governor in the country.

“We must find a way, without sacrificing quality, to change the way in which we do business,” Wilson said. “We simply have to find a means of containing costs.”

Afterward, Wilson told reporters that he has no plans to pursue the issue this year, except to lay the groundwork for future efforts.

“I think we should be working on the solution, but it necessarily is going to have to wait,” he said. “I think we are going to have to work long and hard . . . devising a solution that again is affordable and will not drive jobs out of the state.”

Wilson said Maddy’s plan is the only legislation on the subject he has seen that is “honest and reasonable.”

That proposal would require most companies with five or more employees to offer workers a basic health benefits package. Employees could be required to pay 25% of the premiums for their own coverage and 50% for their dependents.

The state would subsidize low-income workers and low-profit businesses, using a quarter-cent increase in the sales tax, an alcohol tax increase, tobacco tax revenue and new surcharges on fines for drunk driving and drug violations.

Maddy could not be reached for comment Wednesday but has been quoted as saying that he sees little chance for any major health insurance legislation to clear the Legislature this year.

However, Assemblyman Burt Margolin (D-Los Angeles), chairman of the Assembly Insurance Committee, said Wilson was wrong to rule out enacting a legislative solution to the problem in 1991.

“Health insurance reform should be on the agenda this year,” Margolin said. “The groundwork needs to be laid, not through more debate and rhetoric but through the enactment of a statute.”

Margolin’s own proposal was approved by a two-house conference committee just before the end of the 1990 legislative session but fell just short of passage under the threat of a veto from then-Gov. George Deukmejian. The plan, which drew in part from Maddy’s bill, would have phased in a so-called “play or pay” program in which all businesses would be required to insure their workers or pay a new 8% payroll tax to the state.

Margolin warned that a failure by the Legislature and the governor to act this year could prompt several special interest groups, including the medical association, to place health care initiatives before the voters in 1992.

“The practical effect is going to be a ballot battle,” he said.