San Francisco recently joined the growing ranks of local jurisdictions creating new laws that seek to provide health care coverage for the uninsured. On Monday, August 7, it is expected that San Francisco Mayor Gavin Newsom will sign legislation that seeks to provide affordable health insurance to the city's approximately 82,000 uninsured adult residents. The bill, the San Francisco Health Care Security Ordinance, which amends the city's administrative code, establishes the Health Access Program (HAP) for the uninsured and will require that medium-sized and large employers in San Francisco spend a minimum amount per hour on health care for their employees. The bill is scheduled to go into effect July 1, 2007.
According to the San Francisco Chronicle, the proposed ordinance, which was approved on Tuesday, July 25, combines separate health care proposals that had been submitted by Mayor Newsom and Supervisor Tom Ammiano. The introduction of the ordinance notes that, "by establishing [HAP] for uninsured San Francisco residents with an emphasis on preventive care and by requiring businesses to make reasonable health care expenditures on behalf of their employees depending on the businesses' ability to pay, the burden on San Francisco taxpayers for providing health care for the uninsured can be reduced."
However, not all San Francisco residents are happy about the legislation. The Chronicle reported that opponents in the business community, "angered by part of the plan that requires some private employers to help pay for it, were quick to signal that a lawsuit will follow" passage of the bill. At the same time, the Chronicle noted that some industry experts have said that San Francisco's plan could ultimately become a nationwide model for universal health care.
A summary of the Health Care Security Ordinance's key provisions provided by the San Francisco Mayor's Office outlined the following:
- The Health Access Program. For uninsured San Francisco residents, HAP will provide comprehensive health services. Participants would receive medical care through the Department of Public Health (DPH) and the San Francisco Health Plan network of providers, including pubic and nonprofit clinics and hospital. One of the goals of the program is that patients be able to get primary care early in their illness, as opposed to emergency care later on.
Uninsured residents can enroll in one of two ways: individual enrollees could pay a premium, based on an income-based sliding scale; or employers could enroll their employees as a group, by paying a large portion of their premiums. At present, DPH is still developing the rules and regulations governing enrollment, including the rules to discourage employers that currently provide health insurance from dumping their employees into HAP.
DPH has estimated that the program would cost approximately $201 per enrollee, per month. The city will contribute $104 million; premiums and co-payments (mostly from higher income individuals) would comprise up to $60 million of the total amount required; and business premiums (stemming from a minimum expenditure mandate on medium and large businesses, see below) are expected to add another $30 to $40 million.
HAP will be phased in over time.
- Spending Requirements for San Francisco Businesses. The bill requires that medium-sized and large employers in San Francisco spend a minimum amount per hour on health care for their employees.
The legislation defines a "medium-sized business" as an employer for which an average of between 20 and 99 persons per week perform work for compensation during a quarter. Medium-sized businesses would be required to spend a minimum of $1.06 an hour per employee on health care services. This rate would go up 5 percent in 2007, 5 percent in 2008, and 5 percent in 2009.
A "large business" means an employer for which an average of 100 or more persons per week perform work for compensation during a quarter. Large companies would be required to spend a minimum of $1.60 an hour per employee on health care services. This will also increase 5 percent in 2007, again in 2008, and in 2009.
Small businesses (fewer than 20 employees) are exempt, as are non-profit businesses with fewer than 50 employees. In addition, the term "employee" does include persons "who are managerial, supervisorial, or confidential employees," unless they earn under $72, 450 annually ("or in 2007 and for subsequent years, the figure as set by the administering agency").
An "hour paid" is defined as "a work hour or ... hours for which a person is paid wages or is entitled to be paid wages for work performed within the city, including paid vacation hours and paid sick leave hours, but not exceeding 172 hours in a single month." For salaried persons, 'hours paid' is calculated based on a 40-hour workweek for a full-time employee.
A covered employer can provide health care services in a number of ways: health insurance; contributions to a public program for the uninsured, such as HAP; health savings accounts; or direct reimbursement to employees for health expenses.
The Health Care Security Ordinance summary notes that a number of jurisdictions are experimenting with health care reform, including Maryland, New York City, Chicago, and Los Angeles. And, in April 2006, Massachusetts passed universal health care reform.