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Mayor Gavin Newsom has taken credit and sought the national spotlight for a plan he touts as an innovative way to deliver universal health care access to the city’s uninsured. Yet Newsom has consistently ducked the vitriolic public debate over how to the pay for the plan, which a companion measure by Sup. Tom Ammiano would cover with a controversial employer mandate.
But as the measures were headed for the first of at least two hearings before the Board of Supervisors (on July 11 after Guardian press time), a board committee and Newsom’s public health director, Dr. Mitch Katz, finally made it clear that Newsom’s plan can’t stand alone, as much as the business community would like it to.
“The two pieces of legislation were created to and do fit together,” Katz said at a July 5 Board of Supervisors’ Budget and Finance Committee hearing. “One can’t successfully move forward without the other.”
Katz made the comments after budget analyst Harvey Rose said the mayor’s plan doesn’t contain a specific funding mechanism. Rose’s admission prompted Sup. Ross Mirkarimi to characterize the mayor’s proposal as “a one-winged aircraft that doesn’t fly.” Sup. Chris Daly added that “It’s time to be up front that [the San Francisco Health Access Plan] only works if it has significant contributions from outside sources, including Ammiano’s plan.”
Neither Newsom nor his spokesman Peter Ragone returned repeated calls for comment on the issue. The Mayor’s Office also has not fulfilled a June 22 request by the Guardian for public records associated with the plan in violation of deadlines set by the city’s Sunshine Ordinance.
“Celebrating one resolution while pooh-poohing the other is disingenuous, because if they don’t work together, nothing works,” Mirkarimi added at the hearing, shortly before he, Daly, and a mostly mute Sup. Bevan Dufty voted to combine both proposals into one health care plan: the San Francisco Health Care Security Ordinance.
“After today’s meeting,” Ammiano wrote in a follow-up press release, “I’m confident that the citizens of San Francisco and the media will understand that the Worker Health Care Security Ordinance and the Health Access Program are one comprehensive health care plan, and are now codified as such in a single bill.”
The decision to amalgamate left small business owners voicing fears over the economic impact of the employer spending mandate, which would raise an estimated $30 million to $49 million of the $200 million cost of providing health care access for San Francisco’s uninsured.
As the controller’s Office of Economic Analysis points out, most of the financial burden of the employer mandate “falls on businesses with 20 to 49 employees, since these firms currently are less likely to offer health care benefits to their workers.”
With the cost of covering 20 full-time employees’ health care estimated at $43,000 to $65,000, many business owners fear the mandate will result in layoffs, economic downturns, and the erosion of their already marginal profits.
Although the controller predicts a “nearly neutral impact” on the city’s economic picture — a loss of 60 to 590 jobs from staff cuts or business closures mitigated by 140 to 250 new health care–related positions — small businesses worry about the controller’s “moderately adverse impact” prediction for employers who currently aren’t offering health care benefits at mandated levels.
“It’s going to add another $50,000 to my already high health care costs,” John Low, who runs a small company in the Tenderloin, said at the hearing. San Francisco Soup Company owner Steve Sarver claimed the mandate could force him to abandon expansion and hiring plans: “Projects that I was borderline on, I’m now going to go toward eliminating those jobs.”
As written before the July 11 hearings, the mandate would kick in January 2007 for large businesses and the following January for small businesses. Mirkarimi says the board should be “extremely sensitive” to the small business community’s concerns.
“The business community knows best how to speak about profit margins. Right now, an employer spending mandate is the only option in orbit. If there are other options, great, but so far all we’re hearing is nothing but distortion,” Mirkarimi told the Guardian. He said the proposal by some downtown leaders to increase the sales tax by a half cent — an alternative to Ammiano’s mandate — comes from “the same community who would sabotage any attempt to enact a tax-based funding mechanism.”
Mirkarimi told us the mayor’s plan was “prematurely pitched through the media on a national stage,” while Ammiano’s legislation, “which is really the heart and soul of the plan, has struggled to get any notoriety locally.” Mirkarimi told us he hopes Newsom will directly address small business concerns — including the reality that his health access plan can’t work without Ammiano’s mandate.
“The mayor needs to make an effort to show small business that he intends to mitigate the negative financial side effects of his plan. But what is the mayor’s communication? And why is he relying on the Board of Supes to fill in the blanks? The mayor needs to exercise leadership, to admit that for his plan to work somebody has to pay, and decide who that somebody is going to be, then build confidence that he has adequate answers. But right now, he’s deflecting that responsibility onto the board.”
Dr. Katz, who was a member of the Universal Healthcare Council that created the plan to offer health access to all the city’s uninsured residents, said he neither hopes nor believes that all 82,000 of the city’s uninsured will enroll.
“We hope that large employers continue to chose commercial health insurance,” Katz said at the meeting, noting that 95 percent of businesses with more than 100 employees already have commercial health insurance.
“If people enroll in a commercial health insurance plan, the city doesn’t get the revenue, but we also don’t get costs,” said Katz, who believes the city can offer health access to all uninsured residents without building additional health centers.
“All existing clinics and facilities have shown a desire to join the program and accept people,” Katz said, noting that the $104 million the city already spends on San Francisco’s uninsured is on the lowest-income individuals, plus a minute subsidy to small- and medium-size business but no subsidy for large businesses.
“Most of SF’s 82,000 uninsured residents are getting care right now, but not in a rational way,” Katz explained. “I look at how much capacity could we add to health centers by only paying for additional providers, like nurses, doctors. And the answer is a lot. We’re not doing evenings or Saturdays, so we just need to open for more hours and hire more doctors, nurses.”
Acknowledging that the Department of Public Health already saw 49,000 uninsured residents last year, Katz said that doesn’t mean that people are getting what he calls “rational care.”
“So when we create a system, we’ll create a demand,” he said. “It’s not just the woman with a bad cough who comes in, but now she’ll also get a pap smear.” SFBG
For coverage of the July 11 hearing and other updates on the health plan, visit www.sfbg.com.