BILL ANALYSIS
SB 2
Page 1
SENATE THIRD READING
SB 2 (Burton and Speier)
As Amended June 23, 2003
Majority vote
SENATE VOTE :25-14
HEALTH 16-8
--------------------------------
|Ayes:|Frommer, Chan, Chavez, |
| |Chu, Cohn, Goldberg, |
| |Koretz, Lieber, Montanez, |
| |Nakano, Negrete McLeod, |
| |Nunez, Ridley-Thomas, |
| |Salinas, Wolk, Yee |
| | |
|-----+--------------------------|
|Nays:|Pacheco, Bates, Dutton, |
| |Maze, McCarthy, |
| |Nakanishi, Plescia, |
| |Richman |
| | |
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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. 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 specified low-income
individuals.
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
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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 two 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.
FISCAL EFFECT : None
COMMENTS : 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 this bill,
almost 20 million Californians receive health coverage through
employment yet California employers offer coverage at a rate
below the national average.
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.
Having coverage during 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% both worked for
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an employer who offered insurance, and accepted the health
benefits. Another 12% 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.
This bill is supported by a broad range of organizations
including consumer groups, advocates for seniors, provider
organizations, and labor unions. Opponents, such as the
California Chamber of Commerce, are concerned that this bill
will be a burden to business leading to unemployment. Opponents
believe the primary reason employers do not offer insurance is
the excessive cost of health care.
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),
pending in the Senate 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), pending in the
Senate, adds an individual mandate to the requirement in AB 1527
and SB 2 that employers provide coverage. Like SB 2, both AB
1527 and AB 1528 currently contain intent language only. AB 30
(Richman), pending in the Senate, expands HFP to employed
uninsured childless adults whose family income does not exceed
200% of FPL, with premiums paid by the employee and employer
(25%), state (25%) and federal government (50%). SB 921
(Kuehl), pending in the Assembly, proposes a single-payer
system.
Analysis Prepared by : Debra L. Roth / HEALTH / (916) 319-2097
FN: 0002159