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Health insurance reforms bolstered

Ventura County Star

SACRAMENTO — As healthcare reform moved another step forward Wednesday in the Legislature, two new studies were released with findings that bolster the case for action.

At a news conference in Los Angeles attended by Gov. Arnold Schwarzenegger, the UCLA Center for Health Policy Studies released new research that shows a continuing downward slide in the number of Californians who have employer-provided health insurance.

The center’s findings show the percentage of California adults under 65 with job-based insurance dropped from 56.4 percent in 2001 to 54.3 percent in 2005. The drop translates into a loss of coverage for 678,000 people.

“What we’re seeing is the rapid erosion of our health insurance system,” said Richard Brown, director of the research center. “Without substantial reform, the coverage of millions of working families and individuals will be threatened as rising healthcare costs continue to make employment-based insurance unaffordable.”

At the same time, researchers at UC Berkeley’s Labor Center released a report that says enactment of a law to require employers to either provide insurance or pay a fee to the state would have negligible effect on the state’s economy.

The report says the mandate would result in no net job losses and that in a matter of two to three years the increased costs to California businesses would be at most one-tenth of 1 percent of operating costs.

“It is possible to substantially increase health coverage in California without negatively impacting employment,” said Ken Jacobs, chairman of the center. “In fact, expanding health coverage can have a positive impact on the California economy.”

The study found that initial costs would be offset by future decreases in insurance premiums paid by employers who now provide insurance to workers and by the infusion of billions of dollars in federal funds the proposed reforms would allow the state to access.

Jacobs said the economic impact would be equivalent to that of a 30- to 50-cent increase in the minimum wage — increases the state economy has absorbed in the past without appreciable negative consequences.

The Labor Center study contrasts sharply with a report issued Tuesday by the National Federation of Independent Businesses, which found the reform proposals under consideration would result in a net loss of 249,000 jobs from the state.

The new studies were released on the same day that the Senate Health Committee gave its approval to the healthcare reform bill proposed by Assembly Speaker Fabian Nuñez, D-Los Angeles, and Senate President Pro Tem Don Perata, D-Oakland.

The measure, AB8, would require all employers to spend at least 7.5 percent of their payroll on employee health benefits — either by directly providing insurance or by paying a fee into a state purchasing pool that would provide policies for their workers.

The unified Democratic proposal will be the basis for negotiations this summer with Schwarzenegger, whose similar proposal calls for a payroll fee of 4 percent to be paid by employers who do not provide insurance benefits to workers.

Republican legislators remain opposed to any plan that involves a mandate on employers.

“Forcing this tax down the throats of California businesses to pay for a new government-run healthcare scheme will devastate our economy,” said Assembly Republican leader Mike Villines of Fresno. “AB8 may cause nearly a quarter-million Californians to lose their jobs.”