Davis Signs Bill Providing Auto Insurance for Poor

Gov. Gray Davis on Sunday signed landmark legislation offering affordable automobile insurance policies to more than one million low-income motorists in Los Angeles County and San Francisco.

Winding up action on the final bills sent to him by the Legislature last month, the governor also signed a far-reaching proposal establishing minimum staffing standards for hospital nurses but vetoed a controversial measure aimed at overhauling the nursing home system for elderly Californians.

Davis’ action on low-cost automobile insurance capped years of efforts by Democratic lawmakers and consumer rights groups to make a bare-bones policy available to the poor. Supporters said it was the first time in the nation that such a policy would be put into effect.

Specifically, Davis signed SB 171 by Sen. Martha Escutia (D-Whittier) and SB 527 by Sen. Jackie Speier (D-Daly City), setting up three-year pilot auto insurance programs in Los Angeles County and San Francisco. The programs would sell policies only to drivers whose annual income is 150% of the federal poverty level or below. A family of three would qualify for a policy with an income of about $21,000.

The low-cost policies would cost $450 a year in Los Angeles for most good drivers and $562 for single male drivers, ages 19 to 24. The new law would provide maximum liability coverage of $10,000 per injury, $20,000 for each accident and $3,000 for property damage. The limits on most standard policies are $15,000; $30,000; and $5,000.

The legislation was tied to another measure (SB 652) by Speier making permanent the requirement that motorists provide proof of insurance when they renew their vehicle registration. Experts have estimated that one out of five California drivers is not insured and that these motorists account for a disproportionate number of accidents.

“It is a fundamental social responsibility that we provide affordable auto insurance for low-income drivers so we don’t make people criminals for the mere fact of driving to work in Los Angeles County,” Escutia said Sunday through an aide.

Davis also signed a fourth bill (AB 1432) by Assemblyman Rico Oller (R-San Andreas) to authorize a tax credit to insurance companies that take part in the programs in Los Angeles and San Francisco. The measure was part of a compromise negotiated with the insurance industry.

The governor, who has signed a number of measures backed by organized labor, handed unions another victory by signing the nurse staffing bill.

Sponsored by the California Nurses Assn. and opposed by hospitals statewide, it requires the Department of Health Services to establish minimum nurse-to-patient ratios for all licensed hospitals, a process that state government has generally avoided in the past.

But in signing the bill, Davis noted Sunday that for years, hospitals have reduced nursing staffs as a way of cutting costs under managed health care. In some cases, he said, the reductions resulted in an “erosion in the quality of patient care.”

He said the bill (AB 394) by Assemblywoman Sheila Kuehl (D-Santa Monica) would lead to adoption of “realistic standards” for general acute care, acute psychiatric hospitals and certain specialty hospitals. Currently, hospitals must set the level of nursing care according to their assessment of patient needs.

The bill’s state-mandated staffing standards represent a first in the nation, said nurses association President Kay McVay. She asserted that the new law will “save the lives of countless numbers of patients needlessly endangered by unsafe hospital conditions.”

The measure was opposed by hundreds of hospitals, whose executives warned that it threatened to increase costs to patients as the health industry struggles to contain costs. They said there was no solid evidence to support claims that patient care had been eroded or endangered by nursing staff cuts.

But Davis dealt supporters of another health-related measure a defeat.

Davis rejected the Legislature’s most serious attempt at improving nursing homes in 30 years: AB 1160 by Assemblyman Kevin Shelley (D-San Francisco).

The measure would have gradually increased the training, number and pay of certified nurse assistants. It also doubled fines for violations of state law to a maximum of $50,000 for a patient death.

To enlist nursing home support, the bill also promised to readjust state Medi-Cal reimbursement to the homes from the current $88-a-day flat rate to a sliding scale based on patient needs.

Despite pressure to sign it from senior citizens groups, patient advocates, health workers’ unions and even nursing homes, Davis cited budget concerns in rejecting the measure.

The governor said the legislation committed the state to spending at least $500 million over the next five years--a figure the bill’s supporters described as grossly inflated.

In his veto message, Davis pointed out that he had already included $72 million in his budget to pay for a 5% pay raise and some increased staffing.

Shelley said he was “stunned “ by the governor’s veto.

“This bill gave our parents and loved ones in nursing homes the real hope that things would be better and now our hopes have just been dashed,” Shelley said.

Added J. Patrick Luby, spokesman for the American Assn. of Retired Persons: “We’re just really shocked. It seems there’s a lot of people concerned about nursing homes, except the governor.”

Davis also signed:

* AB 518 by Assemblywoman Kerry Mazzoni (D-San Rafael) that allows cities such as Los Angeles and San Francisco to continue administering clean-needle exchange programs.

* SB 703 by Sen. Charles Poochigian (R-Fresno) to earmark $1 million for the construction of the World War II Memorial in Washington, D.C. The state funds would honor Californians who died in that war.

* SB 868 by Sen. Cathie Wright (R-Simi Valley) that further expands the authority of the state inspector general, recently set up as a watchdog of the state’s sprawling prison system. Under the law, the office would have new responsibility to scrutinize more agencies, including the Prison Industry Authority.

* SB 377 by Sen. Richard Polanco (D-Los Angeles), which raises the penalties for correctional employees who have sex with inmates or juvenile wards. Currently, the penalty is a misdemeanor, but the new law would increase the sentence to a possible felony.

Davis also vetoed a measure (SB 873) by Sen. John Vasconcellos (D-Santa Clara) that would have examined the costs and benefits to the state of the “three strikes” law.

In his veto message, Davis said: “An additional study of the ‘three strikes’ law is unlikely to produce much, if any, useful information that is not already available.”

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Times staff writer Amy Pyle contributed to this story.