Newsom Faces Defining Moment in Health Insurance Fight

by Randy Shaw‚ Jan. 11‚ 2006

After 72% of San Francisco voters favored a mandatory health insurance law in November 2004 (it lost by 1% statewide), local legislation imposing the provisions of the measure was the logical next step. But Supervisor Tom Ammiano’s measure to require San Francisco businesses with 20 or more employees to fund or provide health benefits has run into stiff opposition from the same business groups that---along with WalMart and McDonalds---helped defeat the state initiative. Mayor Newsom opposes the legislation “in its current form,” but with John Burton and every major California Democrat backing the near identical state measure, vetoing the local health legislation would be bad policy and even worse politics for the Mayor.

It is hard to believe that there is serious debate over the need for Supervisor Ammiano’s legislation. With San Francisco General Hospital bursting at the seams, and with the lack of a city plan to rebuild it, it is imperative that the city’s businesses stop imposing their health care obligations on city taxpayers.

Leading the charge against policies endorsed by the state and national Democratic Party (as well as the Greens) is the San Francisco Chamber of Commerce. Longtime Feinstein ally Jim Lazarus is now a senior vice president with the Chamber, and his criticism of the Ammiano measure shows how out of touch the business group is with San Francisco.

For example, Lazurus attacks Ammiano’s measure for “requiring businesses to pay health care for workers that don’t live in the city.” But San Francisco voters overwhelmingly approved a local minimum wage (Prop L) that applied to workers regardless of where they lived.

Moreover, for several years groups contracting with San Francisco have been required to pay a wage much higher than the city minimum. This mandate applies regardless of where the employee lives.

In addition, the constitutional right to travel would prohibit San Francisco from limiting its health benefits law to city residents. So the Chamber’s argument conflicts with the will of San Francisco voters as well as the United States. Constitution.

Chamber President Steve Falk opposes the legislation because “it doesn’t address the issue of health care cost and delivery.” But if the legislation did impose a single-payer system in San Francisco that addressed cost and delivery issues, Falk and the Chamber would be first in line to denounce it for “overreaching.”

The Small Business Commission wants further study of the proposal, though nobody believes that such study would result in the business community’s support of employer-mandated health care. All the necessary economic analyses were done when the state legislature enacted what was then known as the “Burton bill,” which San Francisco voters approved after corporate interests subjected it to a referendum.

Given Mayor Newsom’s concern with children’s health and the problems of working families, supporting the Ammiano measure should be a no-brainer. But the Mayor likes to be on the same side of issues as the business community, and prefers to work on issues where he, rather than a Supervisor, takes the lead.

So the Mayor has two choices. He can veto Ammiano’s legislation and find himself on the losing side of a November ballot measure on the issue. This course of action would also identify him as opposing the needs of working families, and would come back to haunt him in a future statewide primary for higher office.

Or the Mayor can make some adjustments to the Ammiano legislation that still maintains its consistency with the state initiative approved by 72% of the electorate. This adjustment could address the number of hours an employee must work to get coverage (currently set at 80 hours per month), and there could also be further analysis of the $345 per employee price tag, which exceeds the cost of a single employee in a group plan through Kaiser.

But at the end of the day, Mayor Newsom cannot veto legislation that has been central to the agenda of the state Democratic Party. Supervisor Ammiano is open to negotiations, and the Mayor should work out an agreement that can lead to the legislation’s prompt enactment.