Proposition 72 (Expansion of Employer-Based Insurance) a California state policy/bill

The sharp rise of healthcare insurance premiums making them more inaccessible to workers during the past years has been one of the pressing problems that people of California face today. Thus, given the need to lower healthcare premiums because of its adverse affect on the patient’s and consumer’s ability to access them, the American Federation of Labor-Congress of Industrial Organizations (AFL-CIO), a federation of state, national and international labor unions with the aim of “enabling working people to build better lives and futures for our families” (AFL-CIO, 2005), endorses the enactment of Proposition 72 through the referendum to provide Californians with better and more adequate healthcare insurance coverage. The organization believes that all people should have access to proper healthcare and the only way this could be achieved given the current healthcare system in place in California is through a comprehensive piece of legislation, in the form of Proposition 72. There is no question that providing healthcare to working individuals is a need that must be addressed. However, statistics show that in 2002, 45 million Americans, 6.4 million of which are Californians, are not insured (Bainbridge, 2004). One reason for such is in the manner that most businesses, not only in California but throughout the United States as well, operate. According to a study conducted by Families USA, most large companies included in their study spent as much as 30 percent on advertising, marketing, and on the salaries of CEO’s and executives ( -- ) these costs are then compensated by cutting down on healthcare coverage leaving millions of workers, together with their families, in the low and middle income range without the security provided by health insurance.

Thus, a comprehensive legislation, through Proposition 72, is the only way that the number of insured workers can be guaranteed by forcing these companies to provide adequate access to healthcare to at least 1.1 million uninsured workers in California (Bainbridge, 2004).

Aside from the need to increase access to healthcare for uninsured workers, there is also a need to contain the rising costs of healthcare premiums for workers who already have access to them. In 2004, the monthly premiums healthcare insurance holders in California pay for has increased by 11.4 percent from 2003 (CHCF, 2004). In the face of rising premium costs, employers that co-pay insurance premiums tend to shift these costs on the employees, forcing them to pay higher premiums. Hence, employees usually cover up to 70% of these premiums. Such increase will have an adverse effect on workers by reducing their wage value in a situation where income increases at a slower rate than premiums.  As a result, workers will be forced default in paying for their premiums and lose their healthcare coverage (Gilmer and Kronick, 2005). In this regard, Proposition 72 provides workers with current insurance coverage protection from the sharp increases of healthcare premiums by setting the standards that employers must pay for.

While some employees simply shift healthcare premium costs to employees, other companies cut benefits instead. By doing so, employees who still have healthcare are left with inadequate coverage, which may not necessarily better than having none at all. If nothing is done to stop these actions, employers may even result to further reduction in benefits reducing workers’ access further. Through Proposition 72, this problem may be avoided because employees are forced to provide healthcare insurance coverage in the areas of prescription drugs, preventive care, and major medical, covering at least the more important aspects of healthcare.

Lastly, Proposition 72’s benefits are not limited to workers alone. Instead it extends to employees, the government, and regular taxpayers, as well. In the case of employees currently providing healthcare, they have a competitive disadvantage against those who do not because of the additional cost healthcare coverage adds upon them. Proposition 72, by forcing all employers to provide healthcare coverage will therefore level the playing field, removing the competitive disadvantage some employers face. Furthermore, by increasing the number of people uninsured and guaranteeing coverage on the important aspects of healthcare, Proposition 72 can help relieve the government of fiscal expenses and reduce the amount taxpayers pay for, due to the medical expenses of uninsured workers (California Journal, 2004). Hence, Proposition 72, although directly benefiting workers alone, also provides indirect benefits to taxpayers, businesses, and the government as well.

Furthermore, it also important to understand that the arguments of Proposition 72’s opponents do not hold true when examined closely. First, it will not force employers to replace private insurance with the government insurance. Since proposition 72 is a standard that strengthens private health insurance it only serves as a guarantee for current insurance holders that should they need assistance from their employers, their employers must help them pay up to 80% of their premiums. Second, Proposition 72 is not going to harm the business climate in California, California has a strong economy and it will improve even better if it is made up of a more productive and healthier workforce.

Proposition 72, by providing forcing employers to pay for 80% of their employees healthcare coverage, is therefore an important piece of comprehensive legislation that California will benefit from. It can reduce the payments made by existing insured workers; increase access to healthcare for those who cannot afford them, ensure adequate coverage of healthcare costs; and benefit businesses by leveling the playing field, governments by reducing fiscal costs, and taxpayers by reducing taxes spent on the medical expenses of uninsured workers.

References

American Federation of Labor-Congress of Industrial Organizations.
California Labor Federation 2004 Biennial Federation Final Resolutions.
22 October 2005. Available at <http://www.aflcio.org>.

American Federation of Labor-Congress of Industrial Organizations. About Us. 22 October 2005 Available at <http://www.aflcio.org/aboutus/thisistheaflcio>.

Bainbridge, David. “Proposition 72: The Health Care Coverage Requirements Referendum”. California Initiative Review (2004). 22 October 2005 Available at <http://www.mcgeorge.edu/government_law_and_policy/california_initiative_review/november_2004/ccglp_cir_nov2004_prop_72.htm>.

California Journal Editors. “Ballot Propositions”. California Journal (2004). 22 October 2005. Available at <http://www.californiajournal.org/news/calj/_O.c.t.ober_2004>.

Families USA Foundation. “Profiting From Pain: Where Do Prescription Drug Dollars Go?” Report by the Families USA Publication No. 02-105. Washington, DC: Families USA. 2002.

Gilmer, Todd and Knonick, Richard. “It’s the Premiums, Stupid: Projections of the Uninsured Through 2013.” Health Affairs Web Exclusive (2005). 22 October 2005, Available at < http://content.healthaffairs.org/cgi/content/full/hlthaff.w5.143/DC1>.

Wilson, Katherine. Snapshot: Health Care Costs 101, 2005 Edition. California Healthcare Foundation. 22 October 2005 Available at <http://www.chcf.org/topics/healthinsurance/index.cfm?itemID=109369>.

Let's make that grade!