Health Care Bill Fails to Pass State Senate Committee

The state’s Senate Health Committee rejected the health care bill AB X1 1 January 28 on a 10-1 vote. The vote effectively killed the measure for this year. It will not be brought before the full Senate in time to place a measure on the ballot to approve funding for the $14.9 billion plan, if at all. The measure was a compromise between Gov. Arnold Schwarzenegger’s plan and the original health care bill AB 8 authored by Assembly Speaker Fabian Nunez and Senate President Pro Tem Don Perata. The California Labor Federation had urged the legislature to amend the bill to address issues of affordability, cost containment, and concerns about the bill’s mandate that all Californians purchase health insurance.

Those became the factors that doomed the bill. State Senator Leland Yee, a member of the Health Committee, announced his opposition to the bill on Jan. 22 because it would require individuals to purchase health insurance with no guarantee of affordability or quality of care. The state’s Legislative Analyst Office also issued a report Jan. 22 questioning the sustainability of the program.

The measure would have raised over $15 billion to expand coverage to just about half of the state’s 6.7 million uninsured through requiring employers to provide a minimum contribution toward their workers’ coverage, getting individual contributions that are related to a family’s income, raising the tobacco tax to $1.75 per pack, imposing a 4 percent hospital fee, drawing down new federal matching funds, and reinvesting state and county savings. Perata said he could not support the plan at a time when California was facing a projected $14.5-billion budget gap. No Republicans on the panel supported the bill, because it would require employers to provide a minimum contribution toward their workers’ coverage.

Senator Leland Yee’s Vote

In announcing his opposition to AB X1-1 the day before the hearing January 23, Senator Yee said he was standing up for working families in opposing the measure. “This bill does not move us closer to the promise of universal healthcare,” said Yee, who is co-author of SB 840, Senator Shiela Kuehl’s single-payer healthcare bill. “Californians should be extremely skeptical of a law which requires them to purchase insurance, but allows insurance companies to charge any amount for the policy. This is not a step in the right direction, but a huge jump backwards for California’s working families without insurance.”

AB X1 1 faced opposition from the California Nurses Association, California School Employees Association, United Food and Commercial Workers, Communication Workers of America, and the Teamsters. Yee said he came to a final decision on the bill after talking with dozens of rank and file union members who urged him to oppose the measure.

He pointed out that under AB X1 1 all Californians would be required to buy insurance with no caps on premiums, no regulation of the costs of insurance or medical expenses, no maximum deductibles, and no floor on how little coverage you must purchase.

“Under AB X1 1 the consumer foots the bill so insurance companies can profit,” said Yee. “We can’t solve this problem through piecemeal approaches. There is no funding in this bill, but only a pledge of an initiative and prayers of increased funding from the federal government. Of course, we all know that the federal government is cutting children’s health insurance and California sends significantly more revenue to Washington than we get back.”

Forum on Health Care Bill

Senator Yee spoke at a public forum at the Centro del Pueblo in San Francisco February 2 sponsored by the California Universal Health Care Organizing Project, which supports Kuehl’s SB 840. The forum also featured a discussion of labor’s position on the health care bill by San Francisco Labor Council Executive Director Tim Paulson and a panel of Jodi Reid, Executive Director, California Alliance for Retired Americans; Michael Lyon, Health Committee Co-Chair, San Francisco Gray Panthers; and Renu Tipirneni, a UCSF Medical Student. About 75 people attended the meeting.

Paulson talked about the labor movement’s work for health care reform statewide and in the city. He said that he agreed that single payer was the best solution and that national legislation was needed. The SFLC, along with dozens of labor councils around the U.S. including the San Mateo County Central Labor Council and California Labor Federation, supports HR 676, the Medicare for All health care reform bill by Michigan Rep. John Conyers. “The San Francisco health access plan that provides health care for the uninsured is as close to universal health care as anything, according to the CNA,” Paulson said. “It is still employer-based and keeps insurance companies in the mix, so it’s not yet universal health care but it is a platform towards universal health care, like the bill that was killed in the state Senate.”

Another factor that doomed AB X1 1 (and has held up SB 840) is the requirement in California for a two-thirds vote to pass a budget or any legislation that requires funding. “I’d like to see single-payer pass in a smaller state that doesn’t have the two-thirds vote requirement,” Paulson said. “We can get health care or paid sick days in San Francisco, but statewide, the two-thirds vote is a barrier. Corporate America can stop progressive legislation,” as a minority of Republicans can block its passage.

Jodi Reid of CARA said that while her organization believes that a Medicare for All system would be a better solution than AB X1 1, Medicare as it exists now doesn’t adequately provide care for seniors. “Medicare has been whittled down into different parts with smaller benefits,” Reid said. “With the Part D prescription drug benefits, seniors are paying more for medicines and in co-payments.”

“For us, the solution is to go back to what Medicare was supposed to be: a program for everyone with equal benefits where everyone pays in according to their ability [through payroll taxes],” she said. “Health care is getting expensive because some are making money off of it. Insurance companies take too much out of it, so the only way to get out of the downward spiral is to get the insurance companies out of it.” While administrative costs and overhead for Medicare total about 3 percent, administrative costs and CEO salaries account for up to 30 percent of the cost of private health insurance.

Don Bechler, organizer for the CUHCOP, said that he agreed with the opinion of the California Alliance of Retired Americans that “no bill is better than a bad bill.” He said that, “Thankfully, we have a Senator who also agrees.” Bechler said that Yee, “played a heroic role in the Senate. He negotiated on behalf of Californians to make sure we didn’t get a bad bill.”

“Being in Sacramento is an eye opener,” Senator Yee said. “Health care is a money maker; everyone makes a profit—insurance companies, doctors, hospitals. You get to where you can’t trust anyone but the people, and that is what I ended up voting for—the people. Single payer is the only way to go to insure that it’s the people who choose, not hospitals or insurance companies.”

Yee said he was under considerable pressure from the governor and the speaker. He said his vote may cost him support in the legislature for his own bills but that, “It was important to stick with my friends and my community.”

The senator was asked what could be done to pass SB 840, which passed in 2006 but was vetoed by the governor and passed again in the Senate last year. Yee said a massive education campaign was needed to show people that a government administered health care system could be effective. “We also have to get labor fully on board behind single payer,” he said. “I understand the idea of getting part of universal health care but if you get a bad bill it will set back the effort to get universal health care.” He said that one of the dangers of AB X1 1 was that it would take money out of other programs that provide a safety net and that if AB X1 1 fails people who can’t afford it, there will be nothing left.

Bechler recounted some of the highlights of the 10 hour hearing in the State Capitol, saying that Health and Human Services Secretary Kim Belshe testified that the cost to individuals for the health insurance plan would be about $187 per month. Fabian Nunez said the cost would be about $200, while the Legislative Analyst Elizabeth Hill said costs would more likely be $250 to $300 monthly.

Bechler said he asked the legislators to be negotiators for the people and get real numbers in writing before passing AB X1 1 or placing the funding measure on the ballot. He said that representatives from Blue Shield and Kaiser testified but none said what the cost of premiums would be. “Finally the Blue Cross guy got up and said it would cost $400 a month for this kind of program.”

Núñez urged committee members change the current system. “There are poor children walking around California without health insurance,” he said. “While this isn’t the perfect solution, it’s the right solution because it’s going to provide them with the health insurance they need.” AB X1 1 would cover California’s 800,000 uninsured children, and around 3 million adults he said.
In a statement after the vote, California Labor Federation Executive Secretary-Treasurer Art Pulaski said that the Federation was committed to passing real health care reform, despite the failure of AB X1 1. “California’s unions have worked tirelessly for years to create affordable health care options for all Californians, and [the] Senate vote will not deter us from that goal. There have been several good elements of AB X1 1 that have led us to believe that our legislators can make real health care reform possible in California.”

Pulaski said that labor had requested amendments to the bill to make health care coverage more affordable and create a fairer employer fee structure. “While those amendments were not taken, we remain hopeful that these conversations will serve as the building blocks for health care reform legislation in California,” he said.

- By Paul Burton