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HEALTH CARE COVERAGE REQUIREMENTS.
Referendum

THE QUESTION

Should SB 2, the Health Insurance Act of 2003, become law?

THE SITUATION

In October 2003, the Governor signed SB 2. Proposition 72 will allow the provisions of SB 2 to go into effect.

THE PROPOSAL

These are the major provisions of SB 2:

• SB 2 will extend health care insurance coverage to many uninsured workers and families, including part-time and seasonal workers, under new employer requirements.
• Employers’ requirements will depend on the number of their employees: with 200+ employees, coverage for employees and their dependents will start 1/01/06; with 50 to 199 employees, coverage for employees only will begin 1/01/07; with 20 to 49 employees, coverage for employees only if a tax credit is enacted.
• Coverage will be provided either by employers directly or by a state program funded by fees paid by employers (“pay or play”).
• Employers’ share of insurance premium costs must be at least 80% and workers’ share no more than 20%. Lowest-wage workers’ share can be no more than 5% of their income.
• Fees will be collected by the Employment Development Department, deposited into a new State Health Purchasing Fund, administered by the state Managed Risk Medical Insurance Board. The Board will establish a purchasing pool and negotiate contracts with health care insurers.

FISCAL EFFECT

Fiscal effects on individuals, businesses, and public agencies could be significant. They are complex, uncertain, and difficult to predict. Many costs will be offset by fees and tax revenues, but the amounts depend on responses of employers, employees, insurers, and the health care and insurance marketplace.

WHAT A YES OR NO VOTE MEANS

A YES vote means that SB 2 will go into effect.

A NO vote means that SB 2 is repealed.

SUPPORTERS SAY

• Too many people, including working people, are uninsured, and their numbers are growing as employers struggle to control costs. SB 2 will insure more than a million Californians.
• Uninsured workers and families are a costly burden on public agencies and a threat to public health.
• Rising costs are forcing businesses to reduce or eliminate health coverage for employees. SB 2 will give the state clout to bargain for cheaper insurance and health care costs.
• Opponents exaggerate SB 2’s costs and other impacts on business and the state economy.

OPPONENTS SAY

• The cost of this bill is too high, at least $5.7 billion for employers and $1.5 billion for employees.
• SB 2 will severely impact businesses and their ability to compete. Workers compensation and pensions are already a heavy burden on them.
• With the state’s finances in deep trouble, this is no time to take on a costly new program.
• Workers who are shifted to a governmentrun program could end up with lower coverage and fewer choices.

For more information:

Supporters: Yes on Prop 72, (916) 442-2308, www.yesonprop72.com

Opponents: Californians Against Government Run Healthcare, (916) 443- 3354, www.stopthehealthtax.org

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