Senate Panel OKs 2 Bills to Expand Health Coverage

A pair of competing Democrat-sponsored bills that would expand health insurance to approximately 6 million low-income Californians and working poor advanced Wednesday in the Senate over protests that employers and taxpayers cannot afford the potentially higher costs.

Approval of the landmark bills by the Senate Health and Human Services Committee marked a substantial step forward in the long-running campaign to replace the current costly and often inefficient health-care system with a mechanism that aims both to cut costs and protect those who cannot now afford coverage.

One bill (SB 2), sponsored by Senate Leader John L. Burton of San Francisco and Sen. Jackie Speier of Hillsborough, would levy a new requirement on employers to provide health insurance for their employees or pay into a state fund, which would purchase insurance on the workers’ behalf.

A second bill, introduced by Sen. Sheila Kuehl (D-Santa Monica), would create a powerful department known as the Health Care Agency, which would purchase insurance on behalf of low-income people who do not have it. The bill would be financed by increases in unspecified new taxes on such things as income, cigarettes and alcohol.

The Burton and Kuehl bills went to the Appropriations Committee for further hearings on votes of 7-1 and 8-1, respectively. Republican Sen. Sam Annestad (R-Grass Valley), a dentist, cast the only no votes.

A spokesman said Gov. Gray Davis had no position on either bill.

Kuehl temporarily removed the tax provisions from her bill, explaining that the state Franchise Tax Board had not completed an analysis of how much each tax should be raised to finance the program. She said she intends to restore the tax features when the computations are complete.

The bills were supported by scores of interest groups, including labor; religious organizations; senior citizens; political clubs; Kaiser Permanente, one of the state’s biggest HMOs; and the California Medical Assn., which recently broke 50 years of tradition and endorsed universal health care.

On the other side, business and employer organizations, health-care plans, insurance carriers and others lined up against the two bills. They warned that, with California in the midst of an economic slump, now is not the time to increase the tax burden on businesses, particularly those with fewer than 50 employees.

“There is no way to pay for this, given the current crisis in California,” said Richard Costigan, a vice president of the California Chamber of Commerce. “You’re not going to swell the ranks of the insured. You’re going to swell the ranks of the unemployed.”

But Sen. Deborah Ortiz, a Sacramento Democrat and committee chairwoman, and Sen. John Vasconcellos (D-Santa Clara) told the representatives of business organizations that they had grown weary over the years of employers testifying against such bills but offering no solutions.

Under questioning, Costigan and other spokesmen indicated that they supported the concept of universal health care, but disagreed on what form it would take and how deeply government would be involved in its operations.

“We recognize the problem. We don’t want to be obstructionists,” Costigan told the committee, noting that his group is working with Speier to find a compromise.

Kuehl and Speier said the rising costs of health care in California and elsewhere had reached “astronomical” proportions, with employers each year facing higher premiums, some up as much as 30%.

They suggested it would be to the employers’ advantage to support a plan that at least offered cost controls that would save money.

Proponents of the two bills testified that although most California employees are covered by health insurance, the working poor and other low-income people cannot afford it. As a result, they run up taxpayer costs by receiving treatment at emergency rooms and from Medi-Cal.

“We are letting a huge number of people suffer needlessly,” testified Bree Johnston, a physician and teacher at UC San Francisco.