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More Details on Health Care Bill and Amendments California Assembly Will Vote on Tomorrow

By Anthony Wright
Executive Director of Health Access California

To add to the article Friday that had our preliminary analysis of the new amendments of a health care deal out of the negotiations between Governor Schwarzenegger and Speaker Nunez, here's some more information about the framework for the financing:

EMPLOYER CONTRIBUTION

The minimum employer contribution would scale up to 6.5%. All employers would need to contribute:

• California employers with payrolls of up to $250,000 a year would have to spend at least 1% on healthcare for their workers.

• Those with payrolls from $250,000 to $1 million would have to pay 4%.

• Those with payrolls of over $1 million up to $15 million would have to pay 6%.

• All larger employers of payrolls of over $15 million that would have to pay 6.5%.

Employers would have the choice of providing coverage privately, as they do now, or paying a fee of this amount to the statewide purchasing pool. The expectation is that employers who provide coverage now, with no requirement, would continue to do so, just as employers pay more than the minimum wage, but the minimum creates a floor from which workers can bargain up from.

TOBACCO TAX

The other news on financing is that the additional funding will be the tobacco tax, rather than the leasing of the lottery. The additional amount will probably be from $1.50-$2.00.

MIDDLE-INCOME SUBSIDIES

We expect that amendments on Monday to also detail the subsidies for folks over 250% of the federal poverty level. Families earning between 250% and 400% of the federal poverty level ($82,600 for a family of four) would be subsidized so that their premium costs will not exceed 5.5% of their incomes. We understand that this would be tied to to a premium for a middle-tier product, rather than the minimum benefit (or top-tier plan). This would mean that those families could choose to spend less than 5.5% for a minimum policy, or a set amount more for a comprehensive policy with little cost-sharing.

EARLY RETIREE CREDITS

There is also planned to be a tax credit for people who retire before they qualify for Medicare at age 65 from 400-700%FPL ($71,000 for a single person and $145,000 for a family of four) so that they would not spend more than 10% of their savings income on insurance.

Health Access California is a statewide health care consumer advocacy coalition of over 200 groups. This article has also been published on the Health Access Weblog.

Posted on December 16, 2007

Comments

The subsidies for middle-incomers are in the form of tax credits, which are not particularly useful in helping people pay a monthly or yearly premium if they don't have the cash flow to do it. And as we enter a recession, that is going to be a major issue for middle-income Californians.

There appear to be no other firm cost control measures, and the only way people can get out of it if they can't afford it is to plead their case to the MRMIB, a difficult and discouraging process for most Californians unfamiliar and unskilled in such bureaucratic methods.

The vote is tomorrow - a reckless decision by Núñez - so where does Health Access California stand on the matter? Yea or nay?

Posted by: Robert in Monterey at December 16, 2007 09:59 AM

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