BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 2|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 445-6614 Fax: (916) | |
|327-4478 | |
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THIRD READING
Bill No: SB 2
Author: Burton (D) and Speier (D)
Amended: 6/3/03
Vote: 21
SENATE INSURANCE COMMITTEE : 6-3, 4/30/03
AYES: Speier, Escutia, Figueroa, Perata, Scott, Soto
NOES: Johnson, Morrow, Oller
SENATE HEALTH & HUMAN SERV. COMMITTEE : 9-3, 5/7/03
AYES: Ortiz, Alarcon, Chesbro, Figueroa, Florez, Kuehl,
Romero, Vasconcellos, Vincent
NOES: Aanestad, Ashburn, Battin
SENATE APPROPRIATIONS COMMITTEE : 8-5, 5/29/03
AYES: Alpert, Bowen, Burton, Escutia, Karnette, Machado,
Murray, Speier
NOES: Battin, Aanestad, Ashburn, Johnson, Poochigian
SUBJECT : Health care coverage
SOURCE : California Labor Federation
DIGEST : This bill enacts the Health Insurance Act of
2003 to ensure all working Californians and their families
are provided health care coverage. (NOTE: The bill makes
only findings and declarations and is to be enacted as a
vehicle for the same subject matter.)
ANALYSIS : Existing law provides for the creation of
various programs to provide health care coverage (coverage)
CONTINUED
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to persons who have limited incomes and meet various
eligibility requirements. These programs include the
Healthy Families Program (HFP) administered by the Managed
Risk Medical Insurance Board (MRMIB), and the Medi-Cal
program administered by the State Department of Health
Services. It also provides for the regulation of plans by
the State Department of Managed Health Care and health
insurers by the State Department of Insurance.
This bill enacts the Health Insurance Act of 2003 and makes
the following findings and recommendations:
1. Working Californians and their families should have
health insurance coverage.
2. Most working Californians obtain their health insurance
coverage through their employment.
3. In 2001, more than 6,000,000 Californians lacked health
insurance coverage at some time and 3,600,000
Californians had no health insurance coverage at any
time.
4. More than 80 percent of Californians without health
insurance coverage are working people or their families.
Most of these working Californians without health
insurance coverage work for employers who do not offer
health benefits.
5. People who are covered by health insurance have better
health outcomes than those who lack coverage. Persons
without health insurance are more likely to be in poor
health, more likely to have missed needed medications
and treatment, and more likely to have chronic
conditions that are not properly managed.
6. Employers who do not provide health benefits to their
workers have an unfair competitive advantage over those
employers who provide health benefits. Employers who
provide health benefits often pay directly for the
failure of other employers to provide health benefits by
providing health benefits to spouses and other
dependents who should be covered by the spouse's or
dependent's employer. Employers who provide health
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benefits also pay directly when a previously uninsured
person becomes an employee and the accumulated health
costs due to lack of insurance burden the employer
providing health benefits.
7. Health benefit costs in California generally are lower
than costs in other states but employers generally are
less likely to offer coverage.
8. Controlling health care costs can be more readily
achieved if all working people and their families have
health benefits so that cost shifting is minimized.
9. It is the intent of the Legislature to assure that
working Californians and their families have health
benefits and that their employers shall either provide
those benefits or pay a user fee to the State of
California so that the state may serve as a purchasing
agent to pool those fees to purchase coverage that would
otherwise have been purchased directly by employers.
10.While covering all working people and their families
will substantially reduce the number of Californians
without health insurance, several million Californians
will still lack health coverage.
11.It is therefore not the intent of the Legislature to
reduce or eliminate funding for safety net programs that
provide access to care for those who remain uninsured.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/30/03)
California Labor Federation, AFL-CIO (sponsor)
Alliance of Catholic Health Care
Amalgamated Transit Union Locals 1555 and 1574
American Federation of Government Employees Local 1881
American Federation of State, County, and Municipal
Employees, plus Locals 1555, 1574, 1902
American Nurses Association of California
Art Directors Guild
Association of Flight Attendants Local 11
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Being Alive Los Angeles
Brewery Soda and Mineral Water Bottlers of California Local
896
Butchers' Union Local 120
California Association of Public Hospitals & Health Systems
California Catholic Conference
California Church
California Commission on Aging
California Commission of the Status of Women
California Conference Board of the Amalgamated Transit
Union
California Conference of Machinists
California Council of Community Mental Health Agencies
California Faculty Association
California Federation of Teachers
California Healthcare Association
California Immigrant Welfare Collaborative
California Independent Public Employees Legislative Council
State Insurance Commissioner John Garamendi
California Medical Association
California National Organization for Women
California Optometric Association
California Physical Therapists Association
California Professional Firefighters
California School Employees Association
California State Council of Hotel Employees & Restaurant
Employees
California State Employees Association
California Teachers Association
California Women Lawyers
Central Labor Council of Contra Costa County
Central Labor Council of Fresno, Madera, Tulare & Kings
Counties
City and County of San Francisco
Communications Workers of America Locals 9000, 9410, 9415,
9423, 9503, 9586, 9588, 14909
Congress of California Seniors
Consumer Federation of California
Consumers Union
East Bay Automotive Machinists Lodge 1546
Electric Journeyman and Production Lodge 1584
Engineers and Scientists of California, Local 20
Faculty Association of California Community Colleges, Inc.
Genentech
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General Teamsters Locals 386 and 890
General Teamsters, Warehousemen, Cannery Workers & Helpers
Union #94
Glaziers, Architectural Metal & Glass Workers #718
Graphic Communications Union Local No. 583
Gray Panthers California
Greenlining
Health Access California
Health Care Employees Union Local 399
Health Care for All-LA
Heartbeat Family Partnership
Hotel Employees & Restaurant Employees International Union
plus Locals 49 and 340
Insure the Uninsured Project
International Association of Bridge, Structural, Ornamental
and Reinforcing Iron Workers Local Union 155
International Association of Machinists and Aerospace
Workers Local 1528
International Brotherhood of Electrical Workers Local
Union 11, 18, 45, 302, 551, 569, 595, 684
International Federation of Professional & Technical
Engineers Local 21
International Union of Painters and Allied Trades Local
Union No. 2345
JERICHO
Kern County Firefighters Union Inc.
Latino Issues Forum
League of Women Voters of California
League of Women Voters of Whittier
Lieutenant Governor Cruz Bustamante
Los Angeles County Board of Supervisors
Machinists Automotive Trades District Lodge #190
Marine Firemen's Union
Mental Health Association in California
Mexican American Legal Defense & Educational Fund
National Association of Letter Carriers plus Branch 183
Northern California District Council - International
Longshore and Warehouse Union
Office & Professional Employees International Union Local
#3
Older Women's League of California
Pacific Institute for Community Organization California
Project
Painters & Allied Trades District Council 36
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Planned Parenthood Affiliates of California
Planned Parenthood Golden Gate, and Mar Monte
Plumbers, Steamfitters & Refrigeration Fitters Local Union
#467
Professional and Technical Engineers, Local 21
Sacramento Building Trades Council
San Diego-Imperial Counties Labor Council
San Francisco Labor Council
San Mateo Building & Construction Trades Council
Sanitary Truck Drivers & Helpers Local 350
Seafarers International Union
Service Employees International Union plus Local 2028
Sheet Metal Workers' International Association
Southern California Typographical and Mailer Union
St. Athanasius Church
St. Athanasius Food Pantry
Teamsters plus Locals 350, 601, 517
Teamsters Joint Council 7 & 42
Union of American Physicians & Dentists
United Farm Workers of America
United Food & Commercial Workers Region 8 States Council
plus Locals 101, 120, 135, 839, 1179, 1442
United Food & Commercial Workers Retiree's Club Locals
373R, 532
United Nurses Associations of California/ Union of Health
Care Professionals
United Steelworkers of America
United Teachers of LA
Utility Workers Union of America Local 246
West Hollywood Democratic Club
Numerous individuals
Support, if amended :
California Association of Health Underwriters
California Association on Physicians Groups
OPPOSITION : (Verified 5/30/03)
Automotive Aftermarket Services
Blue Cross of California
California Assisted Living Association
California Chamber of Commerce
California Federation of Republican Women
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California Manufacturers and Technology Association
California Right to Life Committee
Californians for Affordable Health Reform
Chamber of Commerce, Alhambra
Chamber of Commerce, Azusa
Chamber of Commerce, Burbank
Chamber of Commerce, Cerritos
Chamber of Commerce, Chico
Chamber of Commerce, Clovis
Chamber of Commerce, Encinitas
Chamber of Commerce, Fairfield-Suisun
Chamber of Commerce, Greater Bakersfield
Chamber of Commerce, Greater Fresno
Chamber of Commerce, Greater Riverside
Chamber of Commerce, Irvine
Chamber of Commerce, Merced
Chamber of Commerce, Modesto
Chamber of Commerce, Napa
Chamber of Commerce, Newport Beach
Chamber of Commerce, Redondo Beach
Chamber of Commerce, Salinas Valley
Chamber of Commerce, San Rafael
Chamber of Commerce, Santa Fe Springs
Chamber of Commerce, Temecula Valley
Chamber of Commerce, Thousand Oaks-Westlake Village
Chamber of Commerce, Upland
Chamber of Commerce, Vacaville
Chamber of Commerce, Victorville
Chamber of Commerce, Visalia
Coalition of California Insurance Professionals
Employers Health Care Coalition of Los Angeles
Epler Company
International Mass Retail Association
Orange County Business Council
Orange County Business Council
Paper, Pulp and Film Converters
West Orange County Legislative Committee
Yolo County Farm Bureau
Several individuals
ARGUMENTS IN SUPPORT : According to information provided
by the authors' office:
Working Californians and their families should have health
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insurance coverage and that most working Californians
obtain their coverage through their employment. In 2001,
more than six million Californians lacked coverage at some
time, 3.6 million had no coverage at any time, more than 80
percent of these were working people or their families, and
most of these working Californians without coverage work
for employers who do not offer health benefits. People who
have coverage have better health outcomes than those who
lack coverage, are more likely to be in poor health, more
likely to have missed needed medications and treatment, and
more likely to have chronic conditions that are not
properly managed.
Employers who do not provide coverage to their workers have
an unfair competitive advantage over those employers who
provide coverage, and that employers who provide coverage
to dependents often pay directly for the failure of other
employers to provide coverage for those dependents.
Employers who provide coverage also pay directly when a
previously uninsured person becomes an employee and the
accumulated health costs due to lack of insurance burden
the employer providing coverage.
Controlling health care costs can be more readily achieved
if all working people and their families have coverage so
that cost shifting is minimized.
ARGUMENTS IN OPPOSITION : Blue Cross believes this bill
cannot achieve its aims due to Employee Retirement Income
Security Act (ERISA) preemption problems that may result
in higher rates. Under the federal ERISA preemption act,
state law cannot dictate what benefits an employer provides
if the employer is self-insured. Blue Cross states many
larger employers are self-insured, which means the mandates
for coverage and benefits do not affect them, and that the
extremely rich mandates in this bill will force even more
employers into self-insurance to avoid its mandate. As the
healthier employer groups with fewer claims increasingly
self-insure, the remaining employers will have higher rates
since the pool would be sicker.
Californians for Affordable Health Reform (CAHR) and others
state that cost is the primary reason employers do not
offer coverage, and that this bill would have a
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disproportionate impact on small businesses which are the
ones that cannot afford coverage. CAHR notes the recent
increases businesses have incurred in workers' compensation
costs, the increase in the unemployment insurance tax
contribution employers will pay effective in 2004, and
other currently proposed fee and tax increases. CAHR
believes mandating coverage will lead to many businesses
deciding to lay off employees, delay expansions or cause
employers to consider relocating portions of the business
to other states.
DLW:mel 6/2/03 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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