Wilson Favors Some Changes in Health Coverage

Gov. Pete Wilson declared his opposition Monday to a comprehensive overhaul of the state’s health insurance laws, throwing his support behind a series of proposals he predicted would make small businesses more likely to insure their employees.

Wilson rejected plans proposed by the California Medical Assn.--which would require every employer to insure its full-time workers--and Insurance Commissioner John Garamendi, who wants to replace the employer-based system with a tax-supported plan covering everyone.

The governor’s more modest proposal disappointed the advocates of sweeping change. But Wilson’s personal involvement, even with a limited plan, heartened legislators and interest groups who have complained that an issue crucial to the lives of millions of Californians has been all but ignored for a decade by Wilson and his predecessor, Gov. George Deukmejian.

The key to Wilson’s plan is a proposed, state-run insurance pool to allow small businesses to join together, giving them the marketplace clout enjoyed only by the biggest firms. He also endorsed parts of several bills moving through the Legislature that would require insurers to provide coverage to most small businesses who seek it, limit premium increases, repeal required benefits, and prohibit doctors from referring patients to labs in which they have a financial stake.

Once these changes are in place, Wilson argued, many firms with 25 or fewer employees that cannot afford insurance for their workers will be able to obtain coverage, taking care of the lion’s share of the 6 million Californians who lack basic health insurance.

“By acting now and passing these reforms, we can promote more available and more affordable health insurance that will improve life for California’s workers and employers alike,” Wilson said.

Wilson’s stand, which is similar to a package President Bush has advocated nationally, mirrors that of small business groups represented in the Capitol. It also is similar to the position of large California-based insurance companies such as Blue Cross.

But it falls short of the various proposals for fundamental change proposed by the medical association, the insurance commissioner, or Health Access--a coalition of labor, consumer and religious groups that backs a Canadian-style, government-run system for California.

Maryann O’Sullivan, executive director of Health Access, said Wilson is ignoring the need for a “revolution” in health care.

“There’s a need to dramatically change our health care system,” she said. “This tinkers around the edges.”

Garamendi also described Wilson’s proposal as meager.

“I’m pleased to see the governor stepping up to the plate,” Garamendi said in an interview. “But he has bunted when what we need is a home run. He has basically announced he won’t veto a modest reform proposal that virtually every interest group in Sacramento has already agreed to. There’s nothing new here.”

But Wilson said the stagnant economy and the state’s dismal fiscal picture mean that it will not be “responsible” to back one of the more sweeping plans. He spoke to reporters at a suburban Sacramento dry cleaner whose owner said he could not afford to insure his 22 employees.

“We need a proposal that is reasonable, targeted and that promotes a competitive jobs climate for California,” Wilson said. “I believe this proposal does all these things.”

Studies have shown that between 80% and 90% of those without insurance are either workers or their dependents. Wilson said the proposals he is backing are targeted at those people.

The proposals Wilson supports would:

* Establish a state-run program for businesses that volunteer to combine their resources in a single pool. The state would not provide the insurance but would negotiate with private carriers for those who join the pool, offering different plans for companies to choose from.

* Regulate the premiums charged small employers and require that every insurer accept any business that applies for coverage. This is aimed at preventing insurance companies from accepting only those firms that have healthy or low-risk workers. At the same time, Wilson supports repealing laws requiring insurers to offer certain benefits and instead allowing them to cut costs by offering basic coverage.

* Require that people with previous medical problems be made to wait no more than six months before obtaining insurance, and allow employees with existing conditions to keep their eligibility as they move from one job to another.

* Restrict the ability of doctors to refer their patients to labs or clinics in which they have a financial interest. Wilson also would allow hospitals to have doctors on their payrolls, which they cannot now do.

* Explore the idea of combining health insurance with parts of the workers’ compensation system, which provides benefits to injured workers.

Although nothing Wilson offered Monday was original, several participants in negotiations over health care issues said the governor would be a welcomed addition at the bargaining table. Many are hoping that once engaged in the debate, Wilson can be persuaded to support a more ambitious program.

“It’s nice to have him participating in the process,” said Alan Katz, who represents about 2,000 independent insurance agents as president-elect of the California Assn. of Health Underwriters. “It’s the first time that a governor has really gotten into the issue in at least 10 years.”