Single-Payer Benefit Plan’s Foes Gear Up : Insurance: Business groups fire the first salvos in their campaign against the state health care initiative. Their financial claims are disputed.

Saying they are prepared to spend as much as is needed to defeat the so-called single-payer health insurance initiative, business groups began their campaign Wednesday by contending that the measure would create huge deficits, cost the state jobs and disrupt the health system.

“Essentially, the proposition promises a Cadillac. Unfortunately, it can only afford a Yugo,” said Richard C. Carlson, an economist working for opponents of the measure. Carlson called the initiative an enormous gamble.

Joining the longtime government budget analyst at a news conference were the heads of the California Chamber of Commerce and the California Taxpayers’ Assn., organizations that represent more than 7,000 businesses.

Using strong terms, the business leaders cast the initiative--put on the November ballot by labor unions, senior citizens groups, health activists and others--as “socialized medicine,” bad for business and one of the worst ballot measures for corporate California in years.

Eventually, if the measure passes, it would disburse $150 billion a year in health benefits, making it the fourth-largest health system in the world, behind those of Germany, Japan and France, according to the critics. It would also create the largest government entitlement program ever put together by a state.

The business coalition released a financial analysis written by Carlson that argues that the health system would pay out $100 billion in benefits its first year, but that the payout would rapidly expand and produce a $48-billion deficit by 1998.

Anticipating the claim, supporters of the measure came out with a study of their own. It contends that the measure would produce a $4-billion surplus in 1996, the first year of implementation, and save Californians $55 billion in health care costs within five years.

“Our figures paint quite a different picture than theirs. We believe the plan is adequately funded,” said Paul Milne, spokesman for the initiative campaign, called Californians for Health Security. “Among the things they leave out are the costs we are paying now for bloated insurance company administration, bureaucracy, marketing and profits that consume an enormous portion of the health insurance premium dollars that are paid for by individuals and businesses.”

The measure, which has not yet been given a ballot number by the secretary of state’s office, would require hefty increases in business and personal taxes. As a trade-off, it would free individuals and employers from paying for health insurance premiums or out-of-pocket health expenses.

Under the plan, patterned after the system now used in Canada, money from personal and payroll tax increases, about $46 billion annually, would go into a pool. The pool would be augmented by $60 billion in federal, state and other public money that now goes into programs such as Medicare and Medi-Cal.

Doctors and hospitals would be paid directly by a new state agency set up to pay claims submitted by the providers. The agency would be headed by a health commissioner who would be elected to a four-year term in a statewide vote. The system gets its name because the state would act as the “single payer” of medical bills.

The plan would provide all Californians, regardless of income or health status, with the same health insurance card. It would guarantee them a package of health benefits that both critics and supporters say would be comparable to the best private insurance plans. The plan would operate much like a private plan today, allowing individuals to choose their own physicians and hospitals.

Chief beneficiaries of the plan would be the estimated 6 million Californians who currently do not have public or private health insurance.

Among the big losers would be health insurance companies. Now the middlemen between patients and health providers, they would be replaced by the new state health insurance agency.

Kirk West, president of the state Chamber of Commerce, said the opposition campaign will be greatly helped if President Clinton and Congress enact a national health reform plan before the November election. Supporters then would no longer be able to charge that elected leaders are not doing anything to solve problems in the health care delivery system, he said.

West said the opponents have not yet decided how much money will go into the campaign against the initiative. West said private polls will be conducted with voters and once the opponents determine the level of support for the initiative they will decide how much money to spend.

“There is no division of opinion among large and small employers on this issue,” he said. “We will do what we need to do to defeat it.”