California's Health Care Effort in Doubt after Ruling on S.F. Plan
A federal judge's ruling on Dec. 26 invalidating part of San Francisco's landmark attempt to extend health care coverage to all uninsured adult residents cast new doubt on the viability of a statewide program for covering the uninsured that is now pending in the Legislature.
State attorneys said Thursday that they are studying the ruling, but critics of the sweeping state overhaul said the state plan could be challenged on the same grounds.
Both the city and the state have proposed a similar mandate on employers to provide insurance to their workers or pay part of the cost - a requirement that was struck down in the San Francisco case by U.S. District Judge Jeffrey White, who found that the city was intruding into federal regulation of employee benefits.
"We think the ruling is a good indicator as to what we can expect in a legal challenge of the state version," said Jot Condie, president of the California Restaurant Association. "It
appears that this presents a major challenge."
At issue is the federal Employee Retirement Income Security Act that White concluded in his ruling prohibits the city from regulating employee benefits.
The overhaul legislation, AB1X, is the product of months of negotiations between Schwarzenegger and the Democratic legislative leadership. Although it passed smoothly through the state Assembly in December, the bill will not be taken up by the state Senate until after the holidays when it is expected to be received with skepticism.
Based on the theory of shared responsibility, the bill seeks universal coverage in the hope that once everyone in California has regular access to doctors and preventive care, the overall cost of medical service will decrease.
The program would be funded by a package of fees and taxes that would go to the voters in November.
The requirement that all employers either provide insurance for their workers or pay into a new state purchasing pool on a sliding scale of 1 percent to 6.5 percent of payroll based on company size is a key funding element of the plan and the one that may provide biggest obstacle to passage in light of White's ruling, which San Francisco intends to appeal.
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