California Labor Federation Supports Health Care Reform Bill With Changes to be Negotiated

[courtesy of California Progress Report]

By Art Pulaski
Executive Secretary-Treasurer
California Labor Federation

The California Labor Federation, AFL-CIO, is strongly committed to achieving real health care reform this year. We have worked throughout the year with the Legislature and the Administration to tackle the real and challenging issues of expanding health care coverage, containing costs, and ensuring affordability for working families. It is in this spirit of cooperation and commitment to reform that we can, on behalf of the more than two million members we represent, support ABx1 1 if it is amended to address several outstanding concerns.

ABx1 1 includes many important provisions that will help California’s working families.

We strongly support the establishment of a baseline for employer spending on health care for all employees. By creating a statewide health care purchasing pool, ABx1 1 allows millions of Californians to pool their risk and resources in order to negotiate for more affordable health care. The legislation begins to address costs by creating a framework to help health care purchasers and consumers evaluate the relative cost and quality of health care services. We support the bill’s expansion of public programs and the accompanying proposal for tax credits that will offer affordable coverage options to millions more California families. Guaranteed issue of health insurance will ensure that early retirees, the unemployed, and workers in waiting periods can purchase the coverage they need.

Despite these important advances, ABx1 1 still falls short.

We understand that the legislative leadership intends to pair this legislation with language for a ballot initiative that will provide the financing to implement the bill. In the absence of that language, we have included in our analysis of the proposal a number of issues that we believe must be addressed in that financing package. The specific language of the financing proposal is of critical importance, and, even in the absence of the concerns noted below, we will be unable to give our unconditional support to this package until we have reviewed the proposed ballot language.

To meet the needs of California’s working families, ABx1 1 and its accompanying financing provisions should be amended to address the following issues:

Individual Mandate

An individual mandate to purchase health insurance must be predicated upon guaranteeing that affordable, quality health care coverage is available to individuals subject to the mandate. While this legislation takes a first step toward addressing affordability, it does not ensure the quality of the health care benefit and it does not address the entire affordability issue. To address this problem, we recommend tying the affordability standard to the total cost of a comprehensive (a benefit of at the least Knox-Keene standard plus prescription drugs), high quality (minimal deductible, low annual out-of-pocket limit) benchmark plan. The minimum creditable coverage necessary to meet the mandate should be set and defined as a separate standard.