Healthy SF

SF General will lose much of its federal subsidy under Obamacare

Sasha Cuttler
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137

As President Obama’s Affordable Care Act is phased in over the next couple years, San Francisco General Hospital will lose at least 25 percent of the $123 million it receives from the federal government to offset costs of caring for the uninsured, but hopefully that will be offset by its expansion of those who will have health insurance.

General Hospital receives those funds for being a so-called “safety-net hospital,” a place where those without insurance can still get quality healthcare. Even though the need for such safety nets is supposed to diminish under Obamacare, SF General will remain a critically important safety-net hospital.

Many San Franciscans – including non-U.S. citizens who won’t qualify for coverage under the Affordable Care Act, as well as homeless individuals – will continue to rely on the hospital when in need of medical care.

Yet here and nationwide, concern is brewing about whether funding for safety-net hospitals could be impacted if enrollment in the new state health exchanges doesn’t reach anticipated levels.

“The financial question every state is asking is: What are the newly eligible patients going to do? What plan will they enroll in? Will they enroll?” Greg Wagner, CFO of the San Francisco Department of Public Health, told the Guardian, referring to the health insurance marketplaces created under the Affordable Care Act.

Most safety-net hospitals in the country are bolstered with federal subsidies, and are especially reliant on funds known as disproportionate share hospital payments, or DSH. However, those subsidies are about to be slashed with machete-like strokes.

All told, as much as $18 billion nationwide could be siphoned away from safety-net hospitals by 2020. Compounding that is another $22 billion that could be cut from Medicare subsidies, depending on the number of insured.

There’s an expectation that the looming safety-net budget cut will be offset by the burgeoning population of insured residents who would flock to state health exchanges. It makes sense: Instead of absorbing the entire cost of an uninsured patient, hospitals would be getting money from newly active insurance policies, and no money would be lost.

The New York Times recently ran a story detailing how low-income patients in Georgia may be put in a precarious position under federal healthcare reform because safety-net hospitals in Georgia might not be able to make up for lost funding once DSH payments evaporate.

California isn’t likely to experience this problem to the same degree, Wagner said, because the state chose to expand Medi-Cal, the state version of Medicaid, to include all low-income residents and not just those who previously qualified under a narrow set of criteria. Georgia had the same option to expand, but chose to keep its Medicaid qualifications in place, like many states led by Republicans looking to tweak President Obama.

As things stand, enrollment in Covered California – the state’s health insurance marketplace under the Affordable Care Act – remains low. Until enrollment closes at the end of March, it’s an open question whether it will reach the necessary levels to make up for pending cutbacks.

So far, 59,000 Californians had completed applications and enrolled in health insurance plans within the new marketplace as of Nov. 13. That’s a drop in the bucket, considering that 2.3 million are eventually expected to enroll. According to state data, 203,904 applications had been started online (reflecting an estimated 370,000 individuals). In addition to those applying for Covered California plans, another 72,000 people were determined eligible for Medi-Cal. 

“SF General operates on a huge amount of federal money,” Wagner explained. “Some comes directly from the federal government, and some comes from DSH.” He said the hospital received $123 million in DSH funds last year, “and not all of that will go away” once cuts go into effect.

“Healthy SF will still be around after March 31,” said Wagner. “We’re still retaining the program for anybody not eligible for Medi-Cal, and through Healthy SF those people can still access primary healthcare.”
He even said that under extreme circumstances, like the delivery of a child, for instance, some undocumented immigrants will have the opportunity to enroll in Medi-Cal. 
And it’s not all gloom-and-doom on the subsidy front, either. There is a safety-valve for the safety-net hospitals: If everyone who is expected to enroll in Covered California actually does so, the funding will be available without the need to rely on federal aid. 
But in order to achieve that idyllic plateau, a serious push is needed on the enrollment level. Granted, those enrollment figures should rise. But what if they don’t? 
“If people don’t enroll in the new programs, it will be a big problem,” said Wagner. “If we have a significantly lower enrollment number than we initially predicted, we will have some major financial issues. There’s still some uncertainty.”

He added, “We’ll still provide care for the uninsured at SF General. The money will decrease, but it won’t disappear. By no means will all of the money go away. The hope is that the newly enrolled will offset the decreasing number of uninsured, then the federal government could take the DSH payment and redirect it to the providers.” 

That being said, “we still have lots of optimism moving forward,” Wagner said. “We think people will enroll.”

[Correction: We corrected the amount of the reduction from 50 percent down to 25 percent].

 

Legal foes invited to weigh in on healthcare policy

Michael Redmond
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4

A few years ago, the Golden Gate Restaurant Association lost a legal battle it waged over the employer mandates in the city’s landmark Health Care Security Ordinance, a universal healthcare program that has provided safety-net services for the city’s uninsured since its passage in 2006, partially through the Healthy San Francisco program.

Composed of San Francisco restaurant owners, GGRA took issue with a mandatory employer spending contribution designed to help employees cover healthcare costs. While the city’s flagship healthcare program ultimately emerged unscathed, the lawsuit went all the way to the U.S. Supreme Court and consumed city staff time and legal expenses.

Now that the federal Affordable Care Act is poised to begin, with enrollment in low-income programs starting in October, a new debate has surfaced over whether current employer requirements should stay the same under Obamacare. While ardent supporters of HCSO have urged the city not to make any drastic policy changes because the existing system can help low-wage workers take advantage of federally subsidized healthcare options, local business interests have signaled that they think it’s time to scale back employer contributions.

In late August, representatives from the city’s Department of Public Health sent out invitations to various stakeholders to join an advisory body called the Universal Healthcare Council, which will be charged with “reviewing local policies against the backdrop of the federal law.” Despite the failed, messy legal battle that nearly undermined Healthy SF just a few years ago, and the more recent scandals involving restaurants fraudulently using customer surcharges and still stiffing employees (see “Check please,” April 23), an invitation was sent to Rob Black, executive director of GGRA. For the sake of uninsured employees throughout San Francisco, let’s hope the restaurant association doesn’t have another lawsuit up its sleeve.

Mayor on local health care policy: “Everything is on the table”

Sasha Cuttler And Mary Magee
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15

A recent controversy has been brewing around San Francisco’s Health Care Security Ordinance, the 2006 legislation authored by then-Sup. Tom Ammiano that created Healthy San Francisco, the city’s medical services safety net program for the uninsured.

As we explain in greater depth in an article for tomorrow’s issue of the Guardian, influential forces in the business community such as the San Francisco Chamber of Commerce and the Golden Gate Restaurant Association have been publicly raising questions about the Health Care Security Ordinance in light of the federal implementation of the Affordable Care Act, aka Obamacare.

In a recent article in the San Francisco Business Times, Small Business California President Scott Hauge was quoted as saying, “We question whether Healthy San Francisco should continue in its current form with the ACA coming in.” And an article published today suggests that some are continuing to question whether the HCSO can legally coexist alongside the federal requirements under the ACA despite clarification given by Jon Givner of the San Francisco City Attorney’s Office last Thursday stating that the ACA expressly allows jurisdictions like San Francisco to adopt health-care policies such as the HCSO.

Meanwhile, the message from defenders of the city’s health care policy at a hearing called by Sup. David Campos last week was clear: Funding for employee health care generated by employer contribution provisions under the HCSO will be needed more than ever once the ACA is implemented, because many people who now rely on the low-cost Healthy San Francisco for medical care will suddenly find themselves ineligible for that program and automatically funneled into a new system where they are eligible to sign up for subsidized health care, but won’t necessarily be able to afford it.

The ACA will begin enrollment in October, and will take effect in January of 2014. At that point, roughly two-thirds of current enrollees in Healthy San Francisco will either transition to Medi-Cal (if they earn up to 138 percent of the federal poverty level) or qualify for subsidized health care coverage under Covered California, the health benefit exchange created under the ACA. Things are apt to be the most complicated for Healthy San Francisco enrollees who discover they cannot actually afford to take advantage of the options offered under Covered California. 

For this reason, Campos stressed that the HCSO should remain in place without being scaled back or tampered with, because medical reimbursement accounts provided by employer contributions under the ordinance could serve to fill those gaps and help low-wage earners obtain coverage regardless of income. As things stand, Campos and Healthy San Francisco advocates said, gaps created under the ACA will be filled by stronger HCSO provisions, so the programs stand to complement one another.

But the business community, seeking what GGRA executive director Rob Black described to the Guardian as “guidance” from the city on how to move forward given the pending implantation of federal health care reform, wishes instead to open up a new policy dialogue about the HCSO. The mayor has been receptive to their concerns, and recently reconstituted the Universal Healthcare Council, a body that was previously formed to hash out local health care policy.

A key question is who will be appointed serve on that board: Department of Public Health Director Barbara Garcia will chair it, but so far the only indication of who else will be named is that it will consist of “community, healthcare, labor and business stakeholders,” according to a quote attributed to Garcia in the Business Times. Will the makeup include members of the GGRA, the business organization that sued the city to overturn the employer contribution mandate under the HCSO? 

In response to questions about whether the mayor believed the employer spending requirement ought to be revisited in light of ACA implementation, and who would be appointed to the newly convened healthcare council, mayoral spokesperson Christine Falvey responded ot the Guardian with the following statement: “Everything is on the table as the City develops a plan to best implement [the Affordable Care Act]. This is a great opportunity to see how the city can continue to be a leader in making sure San Franciscans have access to quality healthcare. We are currently updating a membership list for the Universal Healthcare Council. More information on that as it becomes available.”

Michael Mina reaches settlement after overcharging customers at his SF restaurants

Sasha Cuttler
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27
Michael Mina reaches settlement after overcharging customers at his SF restaurants

Celebrity Chef Michael Mina and his four San Francisco restaurants – Michael Mina, RN74, Bourbon Steak, and Clock Bar – have agreed to pay $83,617 to their employees to settle charges of overbilling their customers a 4 percent meal surcharge ostensibly intended to cover the company’s employee health care obligations.

As I reported last week, City Attorney Dennis Herrera is investigating fraudulent use of surcharges by restaurants, and its settlement with Mina Group LLC was the first of what could be dozens with local restaurants to come clean under Herrera’s partial amnesty offer. The company was the city’s worst violator, according to filings last year with the city’s Office of Labor Standards Enforcement, which showed the company collected $539,806 in surcharges and spent just $211,809 on employee health care.

A spokesperson for Mina Group had told the Guardian that a settlement was in the offing and that the company would forward it to us as soon as it was available. Instead, the company leaked the settlement to SFgate.com’s Inside Scoop restaurant column, which posted a story about it on Friday evening, the dead spot in the weekly news cycle.

Mina told Inside Scoop that all the surcharges it collected are being held in a fund for employee health care and the company has lowered its surcharges from 4 to 3 percent to correct the overcharging. San Francisco’s restaurant industry – which waged an aggressive legal battle against the employer health care mandate – is the only industry to use explicit customer surcharges to cover its obligations under city law.

The full joint statement by the City Attorney’s Office and Mina Group follows:

“The City Attorney’s Office and Mina Group announce a settlement regarding surcharges imposed in response to San Francisco’s Health Care Security Ordinance. The settlement terms have been guided in part by findings in which the City Attorney’s Office acknowledges that Mina Group’s employee health care program reflects some best practices in administration of health care surcharge funds.

“Mina Group and its affiliates collected surcharges during 2009 – 2011, as previously reported to the Office of Labor Standards Enforcement (OLSE). The City recognizes that 100 percent of the surcharges collected will continue to be used exclusively for employee healthcare and that the majority has already been used. Under the settlement agreement, Mina Group will contribute $83,617.50 of remaining surcharges to eligible persons who were employees during that period.

“The City Attorney’s Office reaches no conclusions on liability in successfully concluding its enforcement action with Mina Group and its affiliates. Mina Group will continue to fully support the San Francisco Health Care Security Ordinance.”

Check, please

Andrew Lam
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44
Check, please

steve@sfbg.com

San Francisco restaurants that have been cheating their customers and employees — charging diners for city-required healthcare coverage that they aren’t fully providing to workers — will finally be exposed in the coming weeks, with some notable names in foodie circles among the likely culprits.

City Attorney Dennis Herrera is working on settlements with dozens of restaurants that responded to his investigation and partial amnesty offer, which had an April 10 deadline. His effort augments the complaint-driven enforcement actions by the city’s Office of Labor Standards Enforcement, which has collected millions of dollars for thousands of employees of negligent local businesses in recent years.

At issue is the Healthcare Security Ordinance, the landmark 2008 law authored by then-Sup. Tom Ammiano that requires San Francisco businesses to provide a minimal level of healthcare benefits to their workers. Businesses are also required to report spending and surcharge figures to the OLSE annually, with the next report due April 30.

Last year’s data show celebrity chef Michael Mina’s Mina Group LLC — which includes the restaurants Michael Mina, RN74, Bourbon Steak, and Clock Bar — to be the top violator, collecting $539,806 in surcharges from customers and spending just $211,809 on employee healthcare.

Herrera used that list to ask more than 70 businesses to show they are in compliance with the law or reach discounted settlements now to avoid punitive fines or criminal charges later, and Herrera told us he received 60 responses and had his inquiry snubbed by fewer than a dozen.

“It’s too early to talk about how large a recovery we’ll be getting for workers, but I’m pleased with the response rate,” Herrera told us. He refused to estimate how many of the respondents were found to be in violation, but in an April 11 message to reporters covering the issue, his spokesperson Matt Dorsey wrote, “Based on our investigation so far, we anticipate that the majority of these establishments will be required to pay money to compensate their workers.”

WHAT THE FIGURES SHOW

The Guardian contacted many of the restaurants that topped the OLSE list. Some wouldn’t respond, some said they’ve changed their policies since the controversy erupted, and some wouldn’t talk until after a settlement is announced — including the Mina Group. That seems to indicate they’re about to pay for past violations.

Nicole Kraft, who handles public relations for the Mina Group, responded to Guardian inquires by writing, “I wanted to let you know that Mina Group will soon be releasing a joint statement with the City Attorney’s office, which should answer many of your questions. We’ll be sure to send it your way ASAP.” [UPDATE 4/29: Mina Group settled its case for $83,617.]

Sources in the City Attorney’s Office say settlements with as many as 10 restaurants that admit clear violations of the HCSO could be announced in the next week or two, while another 10 or so have provided data showing they are not in violation. The rest are more complicated and could take weeks or months of investigations, which are being led by Deputy City Attorney Sarah Eisenberg.

“There are going to be some that are given a clean bill of health,” Herrera told us. Herrera also told us that his investigation is just getting started and that it will look at businesses that haven’t made required annual reports to the OLSE. “When we get to a place where we’re announcing settlements, we’ll have more to say,” he said when asked for details and dimensions of his investigation.

GGRA Executive Director Rob Black has maintained that the OLSE figures don’t accurately reflect whether businesses are in compliance because the reporting requirements are confusing. GGRA held a compliance workshop on April 17, and Black told us about 40 restaurateurs attended.

“It was very informative and we got really good feedback from the restaurants,” Black told us. “We had people saying, ‘knowing what I know now, we should redo my 2011 form because I did it wrong.”

Black was initially critical of Herrera’s focus on the restaurant industry, but told us last week, “He made a commitment that the process would be efficient and fair, and he’s lived up to that so far….I still believe that the majority [of violators] didn’t have a mal-intent…Many people on the list that was reported have done nothing wrong.”

Cheesecake Factory — which was seventh on last year’s OLSE list, allegedly taking in $159,242 more in surcharges than it spent on employee health care — insists that it is in compliance and expects the City Attorney’s Office to confirm that.

“We believe the City Attorney’s initial review was erroneous,” Richard J. Frings, the company’s vice president of compensation and benefits, told us. “We are in full compliance with HCSO. Our healthcare costs in San Francisco have far exceeded the surcharge that we have collected. Once the City Attorney’s office has an opportunity to review our filings, we believe this matter will be closed without any further action.” He refused to provide figures to support the assertions.

THE HSA PROBLEM

Most of the restaurants that have been accused of stiffing employees use health savings accounts, which health officials say is a far worse option than private health insurance or the city’s Healthy San Francisco plan, which was created in conjunction with HCSO. Federal law bars cities from prescribing how health benefits are delivered.

San Francisco’s restaurant industry has always been hostile to the HCSO’s employer mandate, with the Golden Gate Restaurant Association unsuccessfully challenging the law all the way to the US Supreme Court. Controversy then erupted in 2011 with revelations (first in the Wall Street Journal, followed up by local media outlets) that some of the city’s most high-profile restaurants were shirking their responsibilities even as they charged diners 3 percent to 5 percent surcharges, sometimes essentially pocketing that money at the end of each year.

That verges on consumer fraud, but District Attorney George Gascon has refused to investigate, telling the Guardian and other papers that he was deferring to the OLSE and the City Attorney’s Office.

In 2011, a progressive-led majority on the Board of Supervisors passed legislation authored by Sup. David Campos to require that businesses keep the money they are required to spend on employee healthcare — which is currently $2.33 per employee-hour for large companies or $1.55 per employee-hours for businesses with less than 100 employees — for employees to use as needed.

But under aggressive lobbying by the GGRA and San Francisco Chamber of Commerce — which asserted the right of business owners to raid these funds, calling the set-aside a multi-million-dollar annual loss to the local economy — Mayor Ed Lee vetoed the measure. He later signed watered-down legislation requiring the money be set aside for two years, setting standards for letting employees know how to access the funds, and explicitly calling for all customer surcharges to remain in escrow accounts.

The OLSE, which also monitors compliance with the city’s paid sick leave and minimum wage laws, can only investigate businesses when an employee files a complaint. But then complaints trigger investigations that cover all of a given business’s employees, who are often compensated for past violations. To file a complaint, just write hcso@sfgov.org or call (415) 554-7892.

OLSE figures show the agency has investigated more than 100 complaints since 2008, resulting in $8.1 million in health care benefits provided to more than 6,400 employees and $244,000 in penalties paid to the city. Herrera’s office also reached a $320,000 settlement with the owners of Patxi’s Chicago Pizza in January, just before announcing his broader investigation.

“The vast majority of San Francisco employers have complied with their obligation to make health care expenditures pursuant to the HCSO,” OLSE Manager Donna Levitt told the Guardian. “With respect to the minority of businesses who fail to meet their obligations, the OLSE works tirelessly to ensure that workers receive the benefits to which they are entitled and that all businesses compete on a level playing field.”

Among the restaurants near the top of the OLSE list that did not respond to the Guardian inquires are Squat & Gobble, Wayfare Tavern, and Trinity Building Services.

“We are actually in complete compliance,” Larry Bouchard, manager of One Market restaurant, told us, explaining its inclusion on the OLSE list by saying, “It’s my understanding that we reported the wrong information.” He said the restaurant uses health savings accounts, but that they are widely used by employees, who get their expenditures repaid within three weeks.

Scott Carr, general manager of Boulevard — who sources say was one of the first restaurants to use the healthcare surcharges on customer bills, and whose parent company, Reroute LLC, was fifth on the OLSE list, underspending by $169,777 — told us the figures didn’t fully reflect the company’s spending on employee health care.

He wouldn’t say whether the company will be settling with Herrera for any past violations, but he did say that the restaurants decided to abandon health savings accounts in favor of health insurance policies for employees starting on Jan. 1. As he told us, “We feel we’ve made a positive step.”

SF needs healthy housing

Jesse Hawthorne Ficks
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19

My greatest frustration as a tenants’ rights and affordable-housing advocate in San Francisco is that, despite all the good efforts by a lot of good people, we never address the root cause of our housing crisis. We routinely enact laws and ballot initiatives, organize endless demonstrations and elect progressive politicians, but in the final analysis, these efforts are just a Band Aid on a bad system that leaves a lot of people without a roof over their heads.

A few years ago, Brian Basinger of the AIDS Housing Alliance and I pushed “no fast pass to eviction” legislation to stop the eviction of seniors and people with AIDS and other disabilities through the state Ellis Act.

Ellis allows a landlord to override just-cause eviction protections and evict all of the tenants in a building. It’s often used by speculators to flip properties — that is, buy them, evict the tenants, and create a tenancy-in-common (where there’s the same number of owners as there are apartments). The new owners apply for condo conversion so that, instead of sharing a percentage in the building, they actually own their own units.

No Fast Pass says that if someone uses Ellis to evict tenants, then the building can’t convert to condos for ten years. If any of those tenants are seniors or disabled, it can never be converted. The legislation helped. There was a drop in Ellis evictions. Unfortunately, landlords and speculators now employ intimidation, harassment and buy-outs to get rid of tenants, so that they don’t have to Ellis.

It’s time to get beyond Band-Aids. Housing should be a human right, guaranteed for all, as healthcare is in other nations.

When former Supervisor Tom Ammiano realized that 65,000 San Franciscans (15% of the population) were without health coverage, he (not former Mayor Gavin Newsom, who takes credit for it) introduced legislation to create what is now “Healthy San Francisco,” our city’s version of universal healthcare. It’s not perfect, but it tackles the problem the way it should be tackled: by making healthcare a human right and not a luxury.

The same needs to be done for housing.

As long as housing is a commodity, affordable only to those who have the dough, there will always be people left out in the cold — literally. Our city has more than 10,000 homeless people, not to mention scores of others living (through no choice of their own) in deplorable conditions. The city builds more market-rate housing than it needs, while units for those below 50 percent of the city’s median income fall far short of the demand.

A mandate to house everyone in the city has never been tried. I don’t have an exact plan, but a “Housing SF” (like Healthy SF) might be created by pooling together all of our housing resources and aggressively working to pull in more. If the proposed Housing Trust Fund happens, it should be initially used only for those who need it most — the homeless and the poor, remembering that shelters are not housing, even if they’re considered such under Care Not Cash.

Put a moratorium on market-rate housing. Turn all abandoned properties (both city and privately owned) into affordable units. Raise money by letting the big businesses (including the tech companies) cough up some dough. Use land trusts as much as possible to keep the new places affordable into perpetuity.

It’s time to dream big.

Tommi Avicolli Mecca, editor of Smash the Church, Smash the State: The Early Years of Gay Liberation, is a longtime affordable housing advocate.

Guardian exclusive: the health-care scam chart

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We’ve always found it a bit annoying when restaurants charge an additional fee to pay for Healthy San Francisco, the law that mandates health care for workers. If the cost of eggs goes up, there’s no “special breakfast cost pass-along surcharge.” So it seems to us more like a political statement in opposition to the law than a business expense.

That said, we’re happy to pay an extra 3 percent for a nice meal — if it means the people who cook and serve it get health insurance.

But it’s more than annoying to find that a lot of restaurants charge a special HSF fee — but it never goes for employee healthcare. Attached is an Excel file, based on data from the San Francisco Department of Labor Standards Enforcement, that shows which restaurants charge extra for health care — and how much of that money actually goes to employees.

We’ve also pulled out a list of the top 10 offenders — the restaurants who put the lowest percentage of their Health Savings Account money into actual employee health care. A caveat: Some of these places may just be lucky — maybe none of their employees got sick all year. But still, they’re collecting a surcharge for employee health care, and that’s not where the money’s going.

>>CLICK HERE FOR OUR EXCLUSIVE CHART OF RESTAURANTS WITH SURCHARGES — AND WHERE THE MONEY GOES (xls)

TOP 10 RESTAURANT OFFENDERS
 
Eagle Café

Surcharge: 3%

Reimbursement plan (total allocated): $ 55, 768

Reimbursement plan (total reimbursed): $425.00

 
Tres Agraves

Surcharge: 4%

Reimbursement plan (total allocated): $ 103,503.00

Reimbursement Plan (total reimbursed): $1,497

 
Amici’s

Surcharge: 4.85%

Reimbursement plan (total allocated): $ 125,763.00

Reimbursement plan (total reimbursed): $1,995

 
Blue Plate

Surcharge: 4%

Reimbursement plan (total allocated): $ 41,859.00

Reimbursement plan (total reimbursed): $723

 
Park Chow

Surcharge: 2%

Reimbursement plan (total allocated): $ 93,072.00

Reimbursement plan (total reimbursed): $1,680

 
2223 Restaurant

Surcharge: 4%

Reimbursement plan (total allocated): $79, 817

Reimbursement plan (total reimbursed): $ 1,687

 
Johnny Foleys Irish House

Surcharge: 4%

Reimbursement plan (total allocated): $73, 133

Reimbursement plan (total reimbursed): $ 1,550

 
MarketBar

Surcharge: 3%

Reimbursement plan (total allocated): $ 76,404.00

Reimbursement plan (total reimbursed): $1,673

 
Andalu

Surcharge: 3%

Reimbursement plan (total allocated): $ 122,742.00

Reimbursement plan (total reimbursed): $3,762

 
Wayfare Tavern

Surcharge: 3.5%

Reimbursement plan (total allocated): $ 60,114.00

Reimbursement plan (total reimbursed): $2,403

End the health-care scam

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15

OPINION Last year, after receiving data from San Francisco, the Wall Street Journal reported on an investigation into the use of health reimbursement accounts by several local restaurants. It showed a group of employers evading the city’s health care law while charging their customers a “Healthy San Francisco” surcharge that is never actually spent on employees’ health care.

Rather than providing health coverage to their workers, as customers are led to believe, the restaurants are allocating funds for HRAs — and taking back the funds before they can be used.

The numbers speak for themselves: Of the $62 million that was set aside for health care accounts in 2010, more than $50 million was kept by employers.

>>WHO’S GAMING THE SYSTEM? CLICK HERE FOR OUR COMPLETE GUIDE TO RESTAURANTS WITH SURCHARGES — AND WHERE THE MONEY GOES

Workers spoke about never being notified about the accounts; being forced to jump through numerous, often onerous hoops to receive reimbursements or never receiving reimbursements; facing severe restrictions on use of the funds; and fearing retaliation for seeking to access the funds. It was clear that as long as employers can take back unspent funds they have a large incentive to restrict workers’ access.

In response, Supervisor Campos drafted an amendment to the Health Care Security Ordinance (known as Healthy San Francisco) that would have closed this loophole, which was being exploited by a small number of employers. The Chamber of Commerce, accompanied by the San Francisco Chronicle, made hysterical claims about impending job loss and business closures, and after the Board of Supervisors approved the legislation on a 6-5 vote, Mayor Ed Lee vetoed it.

Supervisors Malia Cohen and David Chiu then authored “compromise” legislation that actually didn’t address the problem. Their version merely allowed employers to take back workers’ health care dollars after two years instead of one. This cosmetic change did, however, provide enough window dressing to please the Chamber, so the supervisors approved it and Mayor Lee signed it into law.

Now, just a few months later, an article in the Public Press showed exactly why we opposed the Cohen/Chiu amendment in the first place: It doesn’t really close the loophole. Employers can still take money back from the HRAs. This creates a clear incentive to choose HRAs over insurance — the worst option for workers. Furthermore, the loophole leaves responsible businesses that provide health coverage to employees through insurance or HSF competing against employers that exploit it by paying less into HRAs.

We find it unconscionable that there are businesses charging customers a health-care surcharge and then keeping the money for profit. What is more unconscionable is that City Hall passed an amendment that continues to let it happen.

The Department of Labor Standards Enforcement compliance data for 2011 will be available next month — and if that continues to show abuse of the HRA provision, then it’s time for the Board of Supervisors to end the charade and truly close the loophole once and for all. Healthy San Francisco is about providing health care for workers — not creating additional profit for businesses.

Assemblymember Tom Ammiano represents the 13th District. Supervisor David Campos represents District 9.

Michael Goldstein, 1953-2011

Jesse Hawthorne Ficks
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7
Michael Goldstein, 1953-2011

news@sfbg.com

San Francisco lost a valued champion of progressive causes on Dec. 2 when Michael Goldstein lost his battle with stage 4 lymphoma after surviving nearly 20 years living with HIV, a disease that helped awaken his political activism.

Michael was born in 1953 in New Mexico, where he was raised. His grandparents had come to New Mexico after surviving the Holocaust, and Michael came to the San Francisco in the early 1980s. Like many gay men of his generation, Michael came here to find community, to create family, and to be welcomed when much of the country was still hostile to the LGBT community.

He worked at Neiman Marcus, dressing “the San Francisco A list,” as he used to say. He studied at City College towards a paralegal certificate and was heavily involved in student politics. He landed a job at AIDS Legal Research Panel, where he worked when he was diagnosed HIV-positive in the mid-’80s.

The news hit hard, and the treatment he began took its toll. The HIV drugs were harsh then and there were many horrible side-effects with these early drugs. At that time, there was very little information or education about HIV/AIDS and there was even less support, from families and from the public.

Our San Francisco political community became Michael’s family. He was also blessed with an amazing friend in Lorae Lauritch. They worked together at NM, became roommates, and lived together with some incredible cats that were dear to him, including Paloma, Huey, Cadeau, and Missy.

Michael was a proud feminist who valued the women in his life and community, leading him to endorse a pair of successive female candidates for the Castro’s District 8 seat on the Board of Supervisors: Eileen Hansen in 2002 and Alix Rosenthal in 2006.

Over the years, Michael served as an elected member of the Democratic County Central Committee (serving as vice president), served as President of the Harvey Milk LGBT Democratic Club, and was appointed to a San Francisco City College citizen oversight board, where his questioning helped bring attention to mishandling of funds at that institution.

Michael was determined, opinionated, persistent, intolerant of bullshit, prickly, always questioning. He challenged us all to move a common agenda, come together beyond our own personal ambitions, but to also never back down out of convenience or feigned civility. “Civility doesn’t make change,” he often said.

I came to know Michael as many came to know him. Michael always showed up in support of every one of our causes. He not only showed up, he advised, opined, debated, argued, protested, got arrested, drafted policy, and so much more. Campaign after campaign, issue after issue — our friendships grew around our passion for politics, our deep concerns about everything, and a strong and unwavering belief that anyone can help make change.

Michael believed that and Michael lived that.

In the past few years, many of us noticed that Michael wasn’t feeling well. We pushed him to go to the doctor. This is a man who spent hours fighting to push through HIV/AIDS policy and funding, healthcare reform, Healthy SF — and he did not have healthcare, had not seen a doctor in nearly 10 years, and was not treating his HIV.

As many know, Michael and I were like brother and sister…often bickering back and forth on whatever was going on. We “debated” like the dear friends we had become. His lack of healthcare was one of the more important issues I would bring up often. As a long term survivor of this condition, Michael knew the score.

As the symptoms of this disease ravaged his body, he retreated from us and attempted to make sense of the unimaginable alone.

Finally at the end of September, Michael was admitted to General Hospital. With the amazing care of Ward 5A, Diane Jones, and all the amazing General Hospital workers, as well as Laguna Honda Staff and at his final resting place UCSF — his care, though coming too late, was the best in the world and gave Michael a fighting chance. He was clearly comforted and supported by his community in his final days, support that mattered so much to him.

If you knew Michael, you know there is a “what comes out of this” part. We all got to really see the results of the hard work we all participated in to rebuild General Hospital, to rebuild Laguna Honda, and to provide healthcare access to everyone, even the poorest among us. Michael, personally, was able to experience the fruits of our collective labor over these years.

He also experienced some areas where there really is a need for some work. We need to remember that AIDS/HIV is still killing people every day. We must improve people’s access to healthcare. We need to protect patients’ access to medical cannabis, even in General Hospital. We need services and we need housing, particularly affordable housing for those who need it, people struggling through this bad economy.

These are our issues and this is our agenda on the left that we have been fighting for.

I will never forget Michael. One of the last real discussions we had about politics was around election time, with Michael remembering the 2010 elections. Michael was probably more upset about what has come out of that election — the beginning of a political shift to the right in San Francisco — than many.

He has been such an integral part of the work that brought our progressive community together and he was devastated by the events tearing it apart. More than anything, he wanted to bring us together, but he ran out of time.

Michael had an agenda. His agenda was to move forward our agenda. It is time to come together and do that.

Debra Walker is an artist, activist, DCCC member, and city commissioner who ran for the District 6 seat on the Board of Supervisors last year.

Supreme Court rejects Healthy SF challenge

Sasha Cuttler
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Supreme Court rejects Healthy SF challenge

The U.S. Supreme Court has decided not to consider a challenge to the Healthy San Francisco program that provides low-cost health coverage to city residents, partially funded by employers who refuse to provide health insurance for their employees, a mandate that prompted a lawsuit from the Golden Gate Restaurant Association.

The decision was a big victory for low-wage workers in the city, as well as California Assembly member Tom Ammiano, who was the driving force behind the program as a member of the Board of Supervisors, taking abuse from the business community for almost a year and holding firm on the need for employers to take responsibility for their employees. Without that mandate, Ammiano successfully argued, businesses that didn’t offer health benefits would enjoy a competitive advantage and their employees’ health care costs would often end up be paid by city taxpayers.

“Today’s Supreme Court decision is an affirmation of San Francisco’s landmark efforts to provide affordable health care to the uninsured. With over 50,000 people receiving health care services and prescription drugs, Healthy San Francisco is a national model for what can be accomplished when the public and private sector work in partnership towards a common goal”, Ammiano said in a prepared statement.

Mayor Gavin Newsom was eventually persuaded to support the mandate and he worked with Ammiano in crafting the final program, which he has since trumpeted as his own while campaigning for governor and then lieutenant governor, for which he won the Democratic nomination.

“The Supreme Court’s rejection of the challenge to Healthy San Francisco is a victory for the 53,000 San Franciscans who have healthcare today through our groundbreaking universal healthcare program. Healthy San Francisco is a model for healthcare reform that works. The High Court’s decision today ensures we can continue providing health care coverage to thousands who would otherwise go without care,” Newsom said in a prepared statement.

Newsom is a former restauranteur and GGRA member, but he did little to dissuade the group from bringing the lawsuit or in urging them to drop it. Many restaurants in San Francisco have taken to adding surcharges on customers’ bills, explicitly citing the increased cost of offering health insurance. But no restaurants that I know of include explicit surcharges for the membership dues they pay to GGRA or the extra contributions some restaurants made to continue pushing this lawsuit after the Ninth Circuit Court of Appeals ruled in the city’s favor.

City Attorney Dennis Herrera, who personally lobbied the Obama Administration to change the federal government stance on whether employer mandates violate federal law, also released a statement thanking the relevant players and singling out businesses that opposed the GGRA lawsuit: “I applaud Assemblymember Tom Ammiano and Mayor Gavin Newsom for their leadership in crafting this policy.  We should be very thankful to the Ninth Circuit Court of Appeals, too, whose thorough decision powerfully affirmed our arguments that Healthy San Francisco’s spending provisions were reasonable, fair and legal.  I would finally express my gratitude to all those from the business community who voiced their support for this program — especially Zazie and Medjool Restaurants, and Nibbi Construction, which filed amicus briefs on our behalf.”

How healthy is Healthy SF?

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news@sfbg.com

San Francisco is getting national attention for its attempt at universal health care. President Obama even applauded the city’s efforts in a speech: "Instead of just talking about health care, [San Francisco has been] ensuring that those in need receive it."

But Healthy San Francisco — a pioneering effort to do at the municipal level what the federal and state governments won’t — is running into some troubling problems, made worse by Mayor Gavin Newsom’s budget cuts.

The program was initiated by Tom Ammiano, now a state assemblymember, with backing from organized labor. Ammiano’s goal was to provide easy access to affordable health care for all of S.F.’s 60,000 uninsured. A local version of a single-payer program, he argued, could provide accessible primary and preventative care, alleviating the need for indigent patients to use the overcrowded and expensive San Francisco General Hospital emergency room as their primary medical provider.

Healthy San Francisco was launched on July 2, 2007, at two Chinatown clinics. It has grown dramatically, and now provides services to more than 34,000 residents at 27 clinics.

Although Newsom sat on the sidelines while Ammiano pushed the legislation, the mayor has now unashamedly claimed the program as his own to promote his gubernatorial campaign. On his Web site he boldly declares that "he’s created the only universal health care program in the country" — with no mention of Ammiano.

The $200 million-<\d>a-<\d>year program is partially funded by an employer-mandate requiring businesses with more than 20 employees either to provide health insurance or pay a fee to the city. The fees are broken down according to the size of the business; as of January 2009, employers pay between $1.23–<\d>$1.85 for every hour an employee works.

Like any traditional health insurance program, Healthy SF has annual fees and point-of-service charges paid by participants. The remainder of the program is funded through state grants.

Opposition to HSF surfaced immediately. The Golden Gate Restaurant Association sued the city even before the program started, alleging that the employer-spending mandate is a violation of federal law.

Kevin Westlye, the association’s executive director, claims his beef is not with the health care system, just with the employer mandate. He suggested that the city raise its sales tax to pay for the program — or that the financial burden should fall on the backs of the billionaires that run privatized health care and pharmaceutical companies.

But the city has only a limited ability to raise taxes, and any tax hike would require voter approval. The employer mandates and fees were much more politically feasible.

Deputy City Attorney Vince Chhabria, who is representing the city on the case, argues, "It is difficult to imagine, in these budget times, that San Francisco could provide universal coverage without employer health care spending requirements."

Federal courts sided with the GGRA initially, but the Ninth Circuit Court of Appeals agreed that the employer-spending mandate was legal. The GGRA appealed to the United States Supreme Court; the court will announce Oct. 5 whether it will hear the case.

That’s not the only litigation facing HSF. A group of low-income residents are suing the city, saying that the system’s annual fees and co-pays are too high. The program’s fees are scaled to the federal poverty level, which is currently set at an annual income of $10,830. A single person making between 101 percent and 200 percent of the federal poverty level — that is, between about $11,000 and $20,000 a year — pays $180 a year for HSF membership. People earning between $40,000 and $50,000 pay $1,350 a year.

There are also co-pays of $10 for medical visits and $5 to $25 for prescriptions — again, typical of health insurance plans.

Bay Area Legal Aid and the Western Center on Law and Poverty are representing three San Francisco residents who say those fees violate federal and state mandates, which stipulate that the city must provide free health care to those who can’t afford to pay. Healthy San Francisco is only one element of the lawsuit; it also claims that San Francisco General Hospital charges low-income people too much and that the city’s medical bills and collection practices aren’t fair.

One of the plaintiffs is Robyn Paige, a San Francisco resident with spine, foot, and hip injuries. Paige contends that she can’t afford the co-payments on her multiple medications each month and must either go without pain medication or borrow money. Lisa Qare, 21-year-old resident with MS, had to wait three weeks for medication for an eye condition that developed as a result of her condition.

A $10 co-pay may not seem like much, but when a patient needs several doctor visits a month and must pay $5 to $25 each for multiple prescriptions, it adds up. "As a result," Michael Keys, a Bay Area Legal Aid lawyer, told us, "those who can’t afford the charges are falling into medical debt or skipping services or medication."

And, not surprisingly, the cash-strapped city is having trouble finding enough staff and facilities to meet all the needs. Nancy Keiler, a Mission District resident and HSF participant, complains that clinic visits are too short, and that "the doctor is too hurried and has too many patients." (That’s a common complaint about private health plans, as well.) After waiting three hours, another HSF participant had to leave without her prescription to get back to work on time.

The long lines and waits will only get worse in the face of budget cuts. Pink slips were already handed out to several hundred San Francisco health care workers and 1,000 more may be laid off this fall.

Robert Haaland, who works with the Service Employees International Union Local 1021, told us the staffing cuts will make the situation much worse. Martha Hawthorne, a public-health nurse, said she thinks that there won’t be enough providers to provide good care — and that many health care workers losing their jobs will have to enroll in HSF themselves, putting even more strain on the system.

Ammiano, the author of the plan, is concerned too. "I’m very worried about it," he said. "It seems to me now that if there’s this budget pain, there will be impacts to San Francisco."

Nathan Ballard, the mayor’s press secretary, tersely denied that HSF will feel any budget pain. Asked about critics’ allegations, he said, "They’re wrong. We are going to expand Healthy SF this year."

Earlier this month, insurance giant Kaiser Permanente joined HSF — meaning that the health care giant will now participate as a provider in the program. Haaland voiced concern about that move, calling it "privatizing through the back door."

Mitch Katz, the city’s public health director, agrees there are flaws to the system, but defends its success. "It is by no means a perfect program," he said, "but we’ve made a big impact." With national health care costs rising three times faster than wages (some believe that health care costs are rising five times faster than wages) the nation is starting to seriously talk about overhauling the entire system. San Francisco is being considered as a model for national health care reform.

Labor leaders have lauded the basic formula of HSF and pushed for the federal reforms to use it as a model. As San Francisco Labor Council executive director Tim Paulson said in a prepared statement, "In San Francisco we demonstrated that legislation providing public health access and corporate participation creates a real path to universal health care coverage."

Research assistance by Gabrielle Poccia

Will the Supremes take Healthy SF challenge?

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By Sarah Phelan

Next stop the Supreme Court?

That at least is where Kevin Westley, executive director of the Golden Gate Restaurant Association, said his group would take its challenge of San Francisco’s Universal Health Care Program, after the US Ninth Circuit Court of Appeals decided this week not to grant GGRA a rehearing request.

But does this threat have any teeth and why is GGRA making it?

GGRA’s threat came even as Mayor Gavin Newsom was expressing his hope, by way of a press release, natch, that GGRA, “will work for, not against, the City and County’s efforts to expand health care access.”

“With an estimated 60,000 uninsured adults, it is time for all of us to collectively focus our efforts on providing health care to our uninsured residents,” Newsom said, after the Ninth Circuit upheld the city’s employer spending mandate.

That mandate requires companies with 20 to 99 employees to spend $1.23 per worker per hour, and companies with 100 employees or more to spend $1.85 per worker per hour.

Newsom called the court’s decision, “a significant victory for the thousands of San Francisco workers who now have access to health care.”

Deputy City Attorney Vince Chhabria said he found GGRA’s insistence on taking the case to the Supreme Court, “very disappointing.”

“26,000 San Francisco workers have become eligible for coverage in San Francisco’s program,as a result of the court’s ruling,” Chhabria told the Guardian. “One can understand why GGRA filed the suit, but now to continue and try to get this ruling overturned is to take away health coverage from thousands of workers.”

So, what are the chances of the Supreme Court taking the case?

“The Supreme Court will take the request seriously, probably, because there was dissent by a handful of the Ninth Circuit’s most conservative judges,” Chhabria said, as he listed the top three reasons why he believes the Supreme Court probably won’t take this case.

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