Business
Email this story |
Print this story
 |
| SHEILA MASSON/ADVANCE The Novato Community Hospital would benefit from increased funding from ABX11, despite a fee increase. |
More Headlines
January 8th, 2009
California health bill to mean higher business costs
By Paul Jones
Staff Writer
Wednesday, January 23, 2008 2:12 PM PST
Businesses in Novato and throughout California will face increased costs, and many employees will be required to buy healthcare if ABX11, the current California healthcare reform bill and its companion ballot initiative, are approved by the legislature and voters, respectively. According to several business organizations, that could mean everything from reduced hours to layoffs for small and medium companies, the majority of Novato’s business community.
The legislation, backed by Gov. Schwarzenegger and State Assemblyman Fabian Nunez, was scheduled to be heard this week in the California Senate, and a ballot funding initiative may be put before voters November of this year. If approved, by 2010 businesses will be subject to a “pay or play” system, either providing employees health insurance, or paying a variable payroll fee into a general pool for employees’ healthcare.
Coy Smith of the Novato Chamber of Commerce said his organization had not taken an overt position on the proposal, but was in general agreement with the California chamber, CalChamber, which recently signed a joint statement with other groups opposing it.
“We don’t (take positions) sometimes on statewide bills … we’ve taken a passive position supporting the California chamber,” said Smith. “(The bill) could potentially increase costs to small and medium-sized businesses, and it would have less of an effect on large businesses.”
Smith said that due to economic conditions, the timing of the measure was wrong.
“Clearly the economy is not as strong today as it was a year and a half ago. It’s not a time to be placing additional expenses or requirements on businesses,” he said. “It could potentially mean cutbacks and lay-offs and hiring freezes. It’d have a negative affect on the Novato economy.”
Representatives of the Novato Independent Business Alliance declined to comment on the issue, but Downtown Novato Business Association president Denise Athas said she felt the bill would do more harm than good.
“The part that will affect small businesses are the employer fees, and if they do raise them 1 to 6.5 percent of payroll, that would be absolutely detrimental to a small business,” said Athas. “I’ve been doing a sort of a rough survey of businesses and where they are today, and all businesses are being affected by the economy. Any additional expense to the employer will put a much greater burden on them.”
The bill will “pool” payments from smaller businesses that do not provide health insurance to fund a portion of the measure. Proponents of the legislation say that because small businesses do not provide health insurance, many of their employees do not purchase it. Because of this, insurance premiums are increased when uninsured patients can’t pay for medical services they’ve used. However, Athas said it was unfair to place the burden on small employers.
“It always seems to go down on the small employer,” she said. “The big businesses are more shielded by cumulative profit, but it’s the small to medium sized that I think will be hurt by this the most.”
John Kabateck of the California office for the National Federation of Independent Businesses, which signed the opposing statement with CalChamber, said small businesses would be hurt most, and noted some larger businesses supported the measure, such as the Coalition to Advance Healthcare Reform.
“The simple math is that larger corporations and organizations can afford healthcare, and many small business owners simply can’t,” he said. “Healthcare is the number one concern for small business. We recognize this is a dysfunctional system, but the solution is not to force small businesses to spend money they don’t have.”
According to Kabateck, “less that 50 percent of small businesses in California are able to afford healthcare, compared to nearly 99 percent of large businesses.”
Kabateck said that another issue with the legislation was the potential for costs to increase over time.
“It doesn’t have an escalator clause,” he said. “As premiums go up, government will find ways to make up the difference. There’s no cost controls in it.”
One Novato non-profit supportive of the measure is the Novato Community Hospital. Mary Strebig, communications and marketing director for the hospital, said its position was represented by the California Hospital Association. Jan Emerson of the association said that the legislation would help California hospitals make up losses incurred through the state’s under-funded Medical program, which is supposed to reimburse hospitals for services to people in the program.
“We, the hospitals, have agreed to tax ourselves 4 percent of our revenues (a provision of the proposal), and then that money would be used to generate matching federal dollars. It would bring in a total of about $4 billion in new money to the hospital system,” she said. “California ranks dead last in the amount of money that our state pays doctors and hospitals to provide care to patients who are qualified for the Medical program … In 2006, California hospitals provided $8.6 billion dollars in uncompensated care.”
Emerson said approximately 40 hospitals, including some private hospitals, would not benefit at all, while nearly 390 hospitals would benefit from government funding or increased payments through the bill’s expansion of insurance.
“We believe strongly that everyone should (be responsible for) a component of health care coverage,” said Emerson. “Our organization for 20 years has had the mission that every Californian should have accessible health care.”
Contact Paul Jones at pjones@novatoadvance.com.
Article Rating
Reader Comments
The following are comments from the readers. In no way do they represent the view of NovatoAdvance.com.
Submit a Comment
We encourage your feedback and dialog; all comments will be reviewed by our Web staff before appearing on the Web site. Any material that is contrary to good taste, contains objectionable material, is not in compliance with community standards or does not meet the standards of the Advance, will not be posted to the Web site.
