BILL ANALYSIS
SB 2
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Date of Hearing: July 1, 2003
ASSEMBLY COMMITTEE ON HEALTH
Dario Frommer, Chair
SB 2 (Burton and Speier) - As Amended: June 23, 2003
SENATE VOTE : 25-14
SUBJECT : Health care coverage.
SUMMARY : Enacts the Health Insurance Act of 2003 with the intent
of ensuring that all working Californians and their families are
provided health care coverage by their employer or through a
state program that purchases coverage using fees paid by
employers who do not provide coverage directly. Also states
legislative intent to not reduce or eliminate funding for safety
net programs that provide access to care for those who remain
uninsured.
EXISTING LAW :
1)Establishes the Medi-Cal program, administered by the
Department of Health Services (DHS), which provides
comprehensive health benefits to low-income children, their
parents or caretaker relatives, pregnant women, elderly, blind
or disabled persons, nursing home residents and refugees who
meet specified eligibility criteria.
2)Establishes the Healthy Families Program (HFP), administered
by the Managed Risk Medical Insurance Board (MRMIB), to
provide low-cost, subsidized health, vision and dental
insurance to uninsured children, with family incomes up to
250% of the federal poverty level (FPL), who are not eligible
for no-cost Medi-Cal, and parents with family incomes up to
200% FPL.
3)Imposes various requirements on health plans and health
insurers that sell coverage to small businesses, defined as
those with 2 to 50 employees. These requirements include
guaranteed issuance of contracts and policies, guaranteed
renewal, limits on the use of preexisting condition
exclusions, and limitations on the extent to which rates can
vary from group to group based on health status or claims
experience.
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FISCAL EFFECT : None
COMMENTS :
1)PURPOSE OF THIS BILL . This bill is intended to build upon our
existing employment-based health insurance system to ensure
that working families have health benefits. According to the
California Federation of Labor, AFL-CIO, writing in support of
the bill, almost 20 million Californians receive health
coverage through employment yet California employers offer
coverage at a rate below the national average. An uninsured
worker must turn to government programs or hope that coverage
can be provided from a spouse's plan. The third alternative is
to simply go without and hope that nothing serious goes wrong.
2)BACKGROUND . According to the UCLA Center for Health Policy
Research, over six million children and nonelderly adults in
California were uninsured for all or part of the year in 2001.
Although 79% of Californians were insured all year, one in
five (21%) lacked coverage for some or all of the year. Of
the 6.3 million Californians who lacked insurance, over 1.3
million were children. Over half the uninsured, 52.6%, or 3.3
million people were uninsured for more than a year. There are
substantial disparities in coverage stability across ethnic
and racial groups. About 86% of whites and African Americans
were insured all year in 2001 compared with lower proportions
for Asian Americans and for American Indians and Alaska
Natives. Latinos are the least likely to be insured all year
(64.1%) and the most likely to be uninsured all year (22.8%).
Coverage stability varies even more by family income. Among
nonelderly persons with family incomes of at least 300% FPL,
89.9% were insured all year compared with just 61.3% of those
below poverty. Just 3.7% of those with incomes of 300% FPL or
more were uninsured all year, less than one-sixth the
proportion (24.8%) of those below poverty.
The state estimates that in the current year, 6.5 million
children and adults are enrolled in Medi-Cal and 669,000
children are enrolled in the HFP. According to UCLA, in 2001,
seven in 10 children and one in five adults who were uninsured
all year were eligible for coverage under Medi-Cal or HFP.
These eligible but unenrolled individuals included over
470,000 children and nearly 360,000 adults.
3)EMPLOYER-SPONSORED HEATLH INSURANCE . Having coverage during
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the year is largely a result of access to employer-sponsored
health benefits. According to UCLA, among adult employees who
were insured all year, 74.0% both worked for an employer who
offered insurance, and accepted the health benefits. Another
12.0% were eligible but did not accept coverage from their own
employer, often because of coverage through another family
member. In contrast, among adult employees who were uninsured
all year, 67.8% work for employers who offered no health
benefits; another 17.8% had employers who offered coverage for
which they were not eligible. Only 14.4% were eligible but
did not take-up the offer. The uninsured are overwhelmingly
low- and moderate-income working families and individuals
without access to affordable coverage through employment.
Based on data from the Current Population Survey, more than
eight in ten uninsured adults and children are in working
families, including half who are in a family with at least one
adult employed full-time full-year.
4)OPPOSITION . Opponents argue that this bill, by requiring
employers to provide coverage, will discourage new businesses
from locating in California, and provide an excessive burden
on small businesses. Opponents believe the primary reason
employers do not offer insurance is the excessive cost of
health care.
5)PREVIOUS LEGISLATION . SB 480 (Solis), Chapter 990, Statutes
of 1999, directs the Health and Human Services Agency (HHSA)
to explore options to provide universal health coverage, and
to report to the Legislature annually on the results of its
efforts. Under the authority of SB 480, HHSA established the
Health Care Options Project for which nine proposals were
developed and published, including public program expansions,
individual and employer tax credits, employer and individual
mandates, single payer models, and combination approaches.
6)RELATED LEGISLATION . This bill is one of several that have
been introduced this year to expand access to health coverage
in the state. It is anticipated that legislation to increase
health access will be considered in a conference committee.
AB 1527 (Frommer) proposes a "pay or play" approach, similar
to this bill, but would apply the requirement only to
employers with more than 50 employees. AB 1528 (Cohn) adds an
individual mandate to the requirement that employers provide
coverage. Like SB 2, both AB 1527 and AB 1528 currently
contain intent language only. AB 30 expands HFP to employed
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uninsured childless adults whose family income does not exceed
200 percent of the federal poverty level (FPL), with premiums
paid by the employee and employer (25%), state (25%) and
federal government (50%). SB 921 (Kuehl) implements a
single-payer system.
REGISTERED SUPPORT / OPPOSITION :
Support
California Labor Federation (Sponsor)
California Medical Association (Sponsor)
AFSCME, AFL-CIO
AFSCME Local 1902
AFSCME Local 2620
AFSCME Union of American Physicians & Dentists Local 206
Alliance of Catholic Health Care
Amalgamated Transit Union Local 1555
Amalgamated Transit Union Local 1574
American Federation of Government Employees Local 1881
American Federation of Television and Radio Artists, San
Francisco
Association of Flight Attendants Local 11
Bakers Union Local 85
Bakery Wagon Drivers Union Local 484
Blue Shield of California
Brewery Soda and Mineral Water Bottlers of California Local 896
Building and Construction Trades Council of San Mateo County
Building and Construction Trades Council of Ventura County
Building and Construction Trades of Sacramento
California Commission on the Status of Women
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Federation of Teachers
California Healthcare Association
California Independent Public Employees Legislative Council
California National Organization for Women
California Professional Fire Fighters State Council
California School Employees Association
California State Commission on the Status of Women
California State Employees Association/CSU Division
California Teachers Association
Central Labor Council Fresno-Madera-Tulare-Kings Counties
Central Labor Council Kern, Inyo, Mono Counties
Central Labor Council of Alameda County
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Central Labor Council of Contra Costa County
Central Labor Council San Diego-Imperial Counties
Central Labor Council San Francisco Labor Council
Central Labor Council San Mateo
Central Labor Council Tri Counties
Communication Workers of America Locals 9000, 14904, 9410,
9414,l 9415, 9423, 9503, 9575, 9586, 9588
Consumers Union
Electrical Workers Local 595
Engineers & Scientists of CA/IFPTE Local 21
Engineers and Scientists of California, Local 20, IFPTE
Fire Fighters-Kern County
Glaziers, Architectural Metal, Glass Wkrs. 718
Graphic Communications Union Local No. 583
Hotel Employees & Restaurant Employees International Union
Hotel Employees & Restaurant Employees Local 340
Hotel Employees & Restaurant Employees Local 49
Hotel Employees & Restaurant Employees Local 681
Hotel Employees & Restaurant Employees State Council
International Brotherhood of Electrical Workers Locals 11,
18,100, 302, 428, 441, 551, 569, 595, 684
International Federation of Professional and Technical Employees
Local 21
International Longshore and Warehouse Union, Northern CA
District Council
Int'l. Alliance Theatrical Stage Employees, Local 504
Int'l. Alliance Theatrical Stage Employees, Local876
Iron Workers Union Local 118
Iron Workers Union Local 155
Iron Workers Union Local 377
ITUP- Insure The Uninsured Project
IUPAT Local Union 2345
Laborers Local 724 - Studio Utility Employees
Laborers Pacific SW Region Int'l. Union of NA
Machinists District Lodge 190
Machinists Lodges 947,1414, 1528, 1546, 1574, 1584, 1596
Marine Firemen's Union
Mexican American Legal Defense and Education Fund
Musicians, Professional Local 47
National Association of Letter Carriers
National Association of Letter Carriers Branch 183
National Association of Letter Carriers, 1333
Office & Professional Employees International Union Local 3
Operating Engineers Local 39
Painters & Allied Trades Dist. Council 36
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Painters & Tapers Local 913
Peninsula Automotive Machinists Union Local 1414
Pipe Trades, Southern CA District Council 16
Planned Parenthood Affilates of California
Plumbers and Pipefitters Local 409
Plumbers, Steamfitters & Refrigeration Fitters 467
Seafarers' International Union
Service Employees International Union
Service Employees International Union CCAPE Local 700
Service Employees International Union Local 1000 CA State
Employees Association
Service Employees International Union Locals 250, 399, 817,
1280, 2028
Service Employees International Union, Joint Council of Interns
and Residents
Service Employees International Union, Local 1877
Service Employees International Union, Pari-Mutual Employees
Guild Local 280
Sheet Metal Workers' International Association
State Building and Construction Trades Council
Steelworkers of America, District 12
Steelworkers of America, Local 1304
Teachers AT Local 1911, Coast Federation of Educators
Teamsters Joint Council 42
Teamsters Joint Council 7
Teamsters Local 36, 350, 386, 517, 572, 601, 890, 896
Teamsters Retirees Chapter 63
Teamsters Retirees Chapter 166
Teamsters Retiree's Chapter 952
Teamsters, Warehousemen, Cannery Workers Local 94
Transport Workers Union Local 250-A
Transport Workers Union of America
Truck Drivers Chauffeurs & Helpers Union Local 692
United Association Local 250 of Los Angeles
United Auto Workers Local 2865
United Farm Workers of America, AFL-CIO
United Food & Commercial Workers Union, Locals 101, 120,135,
324, 373, 373R, 532 Retirees Club, 839, 1442, 1179, 1179
Retirees Club, 1428
United Food and Commercial Workers Region 8 States Council
United Nurses Association of California, AFSCME
United Nurses Associations of California/ Union of Health Care
Professionals
United Steelworkers of America Local 1304
United Teachers Los Angeles
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Utility Workers Union of America, Local 246
Opposition
California Chamber of Commerce
California Federation of Republican Women
Analysis Prepared by : Debra L. Roth / HEALTH / (916) 319-2097