Healthcare looms as key issue for state employers

Times Staff Writer

Healthcare for millions of uninsured Californians looms as a top concern for the state’s employers as Sacramento gears up for another session of the Legislature.

Gov. Arnold Schwarzenegger said this month that cutting healthcare costs and providing better care for the uninsured were top priorities for 2007. And lawmakers are floating ideas as well.

“We’ve got six major issues, and healthcare is No. 1,” said Scott Hauge, president of Small Business California, a nonpartisan advocacy group based in San Francisco.

Michael Shaw, assistant state director of the National Federation of Independent Businesses, said, “The No. 1 issue we are dealing with is healthcare reform. The governor stated he wants to make it a priority, and we’re expecting significant action.”


Business groups say they are wary and wonder whether employers would be asked to cover much of the cost.

In particular, they ask, who is going to pay the upward of $9-billion bill to guarantee care for the 1 out of every 6 adults and children in California who lacks health coverage?

Small-business owners, who say they can’t afford to offer health insurance, gripe that they could be forced out of business if hit with an expensive mandate.

Large corporations, which are providing increasingly costly health benefits, contend that they shouldn’t ante up even more in subsidies. And unions adamantly oppose raising employee co-payments and deductibles.


But Bill Dombrowski, president and chief executive of the California Retailers Assn., said that “everybody has got to step up to the plate” if California wants to expand healthcare.

“Employers recognize that they are going to have to play a role,” Dombrowski said. “But there’s still a question about what the individuals and the healthcare systems will contribute.”

Healthcare isn’t the only issue for California businesses when the Legislature gets down to business in January. Large companies, particularly heavy energy users such as refineries and manufacturers, have other concerns.

They’re planning to keep a close eye on how the Schwarzenegger administration will implement a landmark new law to lower the greenhouse gas emissions that contribute to global warming.

Organized labor, meanwhile, wants to make adjustments to another signature Schwarzenegger law, the 2004 overhaul of California’s workers’ compensation insurance system.

Unions are want to make sure that injured workers receive proper medical care and fair compensation for permanent disabilities.

Employers, who have benefited from steep cuts in premiums, are nervous that any change could send costs spiraling upward once more.

But dealing with the aftereffects of the global warming and workers’ comp laws should be simple compared with meeting the challenge of making health insurance more universal, many employers and unions acknowledge.


“There’s going to be an avalanche of proposals from the Legislature to expand coverage,” said Allan Zaremberg, president of the California Chamber of Commerce.

Business expects to confront a variety of conflicting healthcare plans, including a universal-care mandate, a requirement that all individuals purchase coverage and a government-run, so-called single-payer system.

Labor groups and their allies hope to keep pressure on policymakers by threatening to put a universal health insurance initiative on the November 2008 presidential election ballot.

All the vying interest groups are looking to Schwarzenegger’s Jan. 8 State of the State speech for an indication of how the just-reelected Republican governor will meet his newly declared goal of extending healthcare to at least half of the 6 million currently uninsured Californians.

Schwarzenegger has given little hint of what he has in mind. He has brought in a team of healthcare experts that has held informal discussions with most of the Capitol’s key players.

“The governor is focused on consensus and getting something done,” spokesman Adam Mendelsohn said. He’s “bringing everyone to the table.”

Business representatives, although pleased to be part of the early discussions, are skeptical about how Schwarzenegger will finance expanded health coverage without breaking his long-standing pledge not to raise taxes.

“The message that came from the election is that people are not excited about new taxes. I don’t think it can be done without them,” said Hauge of Small Business California.


Many voters realize that they’re already paying to provide expensive, inefficient medical care for the uninsured through taxes, higher healthcare bills or bigger insurance deductibles and co-payments, said Barry Broad, a lobbyist for the International Brotherhood of Teamsters and other unions representing about 2 million California workers.

“I think people are willing to pay for it in the end,” he said.

Business-friendly Schwarzenegger, if he is truly determined to leave a historic legacy, could use his formidable personality and political punch to make California a national model in developing universal healthcare, Broad said.

“It may be a ‘Nixon goes to China’ kind of issue,” he said, referring to President Nixon’s groundbreaking trip to communist China in 1972.

“I think he is positioned to do it,” Broad said. “The question is whether he takes up the challenge.”