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Issues
Healthcare
 March
18, 2008
Ontario Chamber Opposes
Another Healthcare Tax Proposal
SB 840 creates a new government
run, multi-billion dollar socialized health care system built
from a yet to be specified tax increase, and on false premises
and failed attempts in past legislative sessions.
 Click
here to take action on SB 840.
California voters have twice rejected a government-run health
care system – most recently in Proposition 72 in November 2004
and in another initiative in 1994. Focus groups and numerous
opinion polls on health care reform have reinforced that
California residents do not want a single payer government run
system. And more recently, the Senate voting to oppose the
Governor’s and Assembly Speaker’s proposed healthcare system, AB
X1 1.
While the goal of the legislation to provide health coverage for
all Californians is a laudable one, establishing a single payer
statewide bureaucracy is the wrong approach. We fundamentally
disagree with the two major premises of the bill: (1) government
systems are more efficient than private business, and (2) a
single payer system would be less costly than the current
private system.
It has been estimated by several sources that it would cost tens
of billions of dollars to operate the health care system
envisioned by this bill. There would also be billions of dollars
in start-up and administration costs related to the new agency.
These costs would be financed through new health care taxes on
consumers, employees and businesses in California. Thus, this
bill will result in a multi-billion-dollar-tax increase on
Californians.
February
14, 2008
Healthcare Tax Proposal Fails
Passage
The Governor’s proposed healthcare reform legislation, ABX1 1
the Health Care Security and Cost Reduction Act, failed to pass
the California State Senate last month ending a year long debate
over how to fix California’s failing healthcare system.
“I want to thank Ontario businesses who already provide
healthcare coverage to thousands of workers and their dependents
and for helping us and our business community unite and defeat
this proposed mandated tax burden,” stated Bob Cruz, Chair of
the Ontario Chamber Government Affairs Council.
The Governor’s proposal, ABX1 1 the Health Care Security and
Cost Reduction Act, would have created a new expensive
entitlement program, an expanded Medi-Cal program and would have
imposed a tax on employers. The financing scheme contained in
ABX1 1 also depended on a declining revenue stream of increased
tobacco taxes.
The Chamber believed that the bill posed considerable risks to
consumers, workers, employers and taxpayers, without any
demonstrable evidence that the bill’s promise of increased
health care access could be delivered over the long term.
Late last year, the Ontario Chamber approved specific healthcare
statements that serve as the position of our business community
on healthcare reform. Specifically, the Chamber will:
1. Review and consider legislative and regulatory policies that
preserve the current voluntary employer-provided healthcare
coverage system.
2. Review and consider efforts to contain the costs of premiums.
3. Review and consider legislation to allow employers to offer
more affordable benefit plans that allow choices in coverage.
4. Review and consider policies that prevent cost shifting from
government-provided programs to the private sector.
5. Review and consider policies that curb the expansion of
litigation in the health care system.
In addition, many Ontario-based businesses, including the
self-employed, rely on affordable individual policies for their
health care coverage. ABX1 1 would have imposed substantial
premium increases on these individuals by inappropriately
providing for guaranteed issue and community rating, while
avoiding enforcement of the individual mandate. New York and New
Jersey have similar individual market provisions, and suffer the
highest individual health insurance premiums in the country.
Moreover, the health care package undermined the intent and
spirit of the Employee Retirement Income Security Act (ERISA),
which is to allow multi-state employers to provide and
administer uniform health care benefits to their employees.
Recent federal court rulings in Maryland and New York have
emphatically held that state employer mandates violate ERISA.
One of the major concerns of the Chamber was the proposal’s
funding mechanism. A report by the Legislative Analyst’s Office
showed the plan was structurally underfunded. In addition to
general fund risks, the Senate President Pro Tempore Don Perata
(D-Oakland) expressed concerns prior to the vote that the plan
would create the third-largest program in state government in a
year when California faces an estimated $14.5 billion budget
shortfall.
February
14, 2008
Healthcare
Reform Still A Top Priority of State Leaders and Ontario Chamber
The Ontario Chamber of Commerce reviewed the Governor’s new
healthcare proposal and will continue to review the proposal as
it unfolds in the legislature. The State Assembly has voted and
approved the proposal with Assembly Speaker Fabian Nunez
co-authoring the piece of legislation. If the proposal passes
the State Senate, funding part of the proposal will go to the
voters for their approval during the November 2008 election.
Click
here for arguments in support
Click
here for arguments in opposition
“Healthcare reform is one of our top priorities,” stated Bob
Cruz, Chair of the Ontario Chamber’s Government Affairs
Committee. “Although we are concerned about the financial
impacts to our businesses, especially small businesses, we know
that paying for reform must not solely rest on the backs of
businesses,” continued Cruz.
The Governor’s healthcare proposal, in the legislative form of
AB X1 1: Health Care Security and Cost Reduction Act, has to
await approval from the State Senate. If approved, the proposal
would provide medical coverage to about 70 percent of
Californians who are permanently uninsured. The caveat to the
legislation is that the Governor is asking voters to go to the
polls in November to approve the funding mechanism which
includes hospital fees, an increased tobacco tax and an employer
fee among others.
Some highlights of the Governor’s healthcare proposal, AB X1 1
which Assembly Speaker Fabian Nunez has helped co-authored:
AB
X1 1 would create a vast and expensive new health care program
funded partially by a costly payroll tax on California employers
and increased tobacco taxes.
AB
X1 1 would also require voters to go to the polls in November to
approve the funding portion of the proposed healthcare plan.
Requires
that all Californians take responsibility for their health
coverage (individual mandate).
Guarantees
that no Californian will be turned away from buying insurance
based on their age or medical history.
Spreads
responsibility across individuals, government, hospitals and
employers (shared responsibility).
Makes
coverage more affordable for individuals and families through
tax credits and subsidies.
Helps
keep hospitals and emergency rooms open by increasing Medi-Cal
reimbursement rates.
Allows
individuals to choose their health coverage and keep their
current insurance.
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