(June 23, 2009) The California Chamber of Commerce has identified a new “job killer” bill that would make it more difficult for employers to afford health coverage for their employees.
CalChamber-opposed SB 227 (Alquist; D-Santa Clara) increases health care premiums by establishing a new targeted tax and government bureaucracy to change California’s major risk medical insurance program (MRMIP).
The MRMIP provides major risk medical coverage to people who have been rejected for coverage by at least one private health plan. This bill would require a health plan to either accept for coverage at specified set rates those previously denied coverage, or pay a “fee.”
The “fee,” which the CalChamber has identified as a tax, would be adopted by a simple majority vote, even though the law requires a two-thirds majority vote by the Legislature to pass a tax.
Industry-Specific
SB 227 singles out a specific industry and its purchasers to pay for a broad-based public program to provide health care coverage for Californians who are “medically uninsurable.”
This proposed scheme establishes a new tax on health plans that would most likely be passed onto employers that purchase health insurance, further eroding the affordability of health coverage.
CalChamber Position
The CalChamber shares the concerns regarding access to and affordability of health care for all, including the “medically uninsurable.” Reforms being considered at the federal level, however—including guaranteed issue, modified community rating and the enactment of an individual coverage requirement—bring into question the need for a state high risk pool or a MRMIP in the future.
With modified community rating, health plans may vary the community rate based on limited factors such as age, gender or smoker status. State modified community rating laws vary greatly. Some allow for many adjustment factors, but many allow for just a few.
California should not create a system that could conflict with, duplicate or overlap a new federal program.
Action Needed
SB 227 is scheduled to be considered by the Assembly Health Committee on June 30. The CalChamber is urging employers to contact committee members and urge them to oppose SB 227.
A sample letter is available at www.calchambervotes.com.
Staff Contact: Marti Fisher