At a recent hearing on San Francisco’s Health Care Security Ordinance — once-controversial legislation that is now in the business community’s crosshairs once again — a nursing student stood at the podium to address members of the Board of Supervisors Neighborhood Services & Safety Committee.
She told them about her mother, who battled illness but did not have access to healthcare for 14 years due to her immigration status, recalling a day when her mother explained why she wasn’t seeking medical attention: “If I go to the hospital, I’ll bury you in debt.”
For the uninsured and undocumented, going without medical care or going into insurmountable debt could be the only options if it weren’t for Healthy San Francisco, a medical services safety net that was created by the HSCO in 2006. The program is expected to continue to provide care for undocumented enrollees who won’t be eligible for federal assistance once the Affordable Care Act, also called Obamacare, takes effect early next year.
The HCSO’s mandate that businesses provide some healthcare coverage for their employees was fiercely opposed by the business community, which challenged it all the way to the US Supreme Court. Now, those same powerful forces are gearing up for a fresh challenge that could jeopardize HCSO’s potential to fill coverage gaps that will be created under Obamacare.
Under federal health care reform, two-thirds of the enrollees in Healthy San Francisco will become ineligible to continue receiving coverage because they will automatically gain eligibility for some form of federal assistance. Those earning up to 138 percent of the federal poverty level will be guaranteed coverage under Medi-Cal. But for low-income earners whose wages hover around $14 an hour, things are far less certain because they will be eligible to enroll in the federally created health benefit exchange, Covered California, although they won’t necessarily be able to afford it. For someone earning around $30,000 per year before taxes, the estimated monthly cost for a health insurance plan under Covered California hovers at more than $200 per month, in many cases making it too much of a stretch.
As things stand, uninsured San Francisco employees who earn too much to qualify for Medi-Cal, but not enough to afford enrollment in Covered California — despite being eligible — can still access funds set aside for them in medical reimbursement accounts under the HCSO. This option may provide enough of a financial boost for low-wage earners to take advantage of federally subsidized health insurance after all.
“For working people, the implementation of the Affordable Care Act actually makes the Health Care Security Ordinance more important,” explains Ian Lewis, research director at UNITE-HERE Local 2. “There are many consequences of the ACA … and the Health Care Security Ordinance is a buffer against them.”
As it stands, the local law “makes Covered California actually work in a high-cost city like ours,” Lewis added.
Under HCSO, San Francisco employers are required to contribute toward employees’ health care on a per-hour basis for each employee working more than eight hours per week, regardless of immigration status or city of residence, amounting to an estimated $255 per participant per month.
This mandate, known as the Employer Spending Requirement, has been the target of multiple lawsuits brought against the city by the Golden Gate Restaurant Association since the landmark health care ordinance, authored by then-Sup. Tom Ammiano, was first enacted in 2006.
That same requirement also makes the local ordinance stronger than the federal law when it comes to worker protections, because the federal mandate only requires employers to offer coverage for workers who put in 30 hours a week or more. That has prompted businesses nationwide to reschedule their workers down to 29 hours per week in a gesture of opposition to health care reform, but no such incentive exists in San Francisco because of the hourly contribution requirement.
Now that federal health care reform is poised for implementation, with enrollment set to begin in October and a transition to the new system slated for early next year, GGRA and the San Francisco Chamber of Commerce are urging the city to open up a new policy dialogue about employer requirements under the local health care law — and Mayor Ed Lee has been receptive.
“We question whether Healthy San Francisco should continue in its current form with the ACA coming in,” Small Business California President Scott Hauge told the San Francisco Business Times (“Healthy San Francisco, related program to shrink dramatically, but not price tag,” July 16). Hauge has met with Jim Lazarus, the Chamber’s senior vice president for public policy, and GGRA Director Rob Black on the issue, the article noted.
Reached by phone, Black emphasized to the Guardian that GGRA employers are merely seeking guidance on how businesses should comply with the local and federal mandates. “It’s important that we really focus on getting together, and getting together quickly,” Black said, to ensure “San Franciscans have access to the full benefits and subsidies of the Affordable Care Act.”
Longtime advocates of Healthy San Francisco and progressive policymakers are watching closely. “They’ve been trying to get out of their responsibility to provide worker’s health care since the law was passed,” Hillary Ronen, a legislative aide for Sup. David Campos, said of business interests who are airing complaints about employer requirements.
Once the federal law takes effect, San Francisco employers will have the option of either providing coverage, or contributing to a city program that establishes medical reimbursement accounts for employees administered by city government, Ronen explained. A third option, “standalone health reimbursement accounts,” under which employers manage reimbursement funds for employees, will be rendered illegal under Obamacare. That system generated controversy in recent years because employers were placing undue restrictions on the use of those funds, and in some cases even pocketing the money after neglecting to inform their workers that it was available (see “Check, please,” 4/23/13).
On July 25, Lee announced that the city’s Universal Health Care Council, a body previously tasked with guiding local health care policy, would be reconvened to “examine San Francisco’s implementation of the Federal Affordable Care Act (ACA) and engage stakeholders in identifying necessary local policies” to support the transition.
In response to signals that the business community is gearing up for a fresh challenge to the city’s health care law using the ACA as ammunition, Campos convened a hearing July 25 to discuss the importance of the HCSO in relation to the federal law.
For several hours, advocates of Healthy San Francisco — many of them members of the immigrant community who would have no other options if it weren’t for the program — delivered passionate defenses of the current program. Campos emphasized that federal health care reform stood to be a great success in combination with the local health care ordinance, which would serve to fill in any gaps in coverage.
Deputy Director of the Department of Public Health Colleen Chawla explained during the hearing that of the 60,000 San Franciscans currently enrolled either in Healthy San Francisco or SF Path, a second medical assistance program, roughly 40,500 will automatically become eligible to enroll either in Medi-Cal or Covered California under federal health care reform come January. The remaining 19,500 won’t be eligible, however, mostly due to immigration status. Healthy San Francisco is expected to continue providing a safety net for those who would otherwise fall through the cracks. But when it comes to the two-thirds who are eligible for federal assistance, but may not be able to actually afford it, things would be thrown into uncertainty if the Employer Spending Requirement were altered or eliminated. “Folks in the business community would be happy to say, the Affordable Care Act is enough, and businesses shouldn’t be complicated with an additional burden,” notes Le Ly, program director at the Chinese Progressive Association. But the HCSO “is an important pillar of the total continuum of care,” he said. “We see it as continuing to complement and strengthen health care coverage.”