CA: Health Care Debate is On

Thursday, January 11, 2007

Freedom to Form Unions Conference Call

Today at 4pm EST, the Progressive States Network will be sponsoring a conference call for legislators and advocates interested in discussing in more depth the policy options for state action in strengthening the freedom to form labor unions. The call will be cosponsored by the National Labor Caucus of State Legislators (NLC).

Thursday, January 11
4pm EST/1pm PST
1-800-391-1709 (Conference ID# 709424)
Please RSVP at

Valuing Families

by Adam Thompson

California: The Health Care Debate is On

The debate to reform California's health care system is on. This past Monday, Governor Arnold Schwarzenegger proposed a sweeping reform of the state's health care system designed to achieve universal coverage through a mix of new rules and requirements targeting employers, insurers, and individuals. Last month, two of the legislature's leading legislators, Senate President Pro Tem Don Perata and Assembly Speaker Fabian Nunez, released their own separate reform proposals that are just as comprehensive.

All three plans include employer, employee and individual mandates to purchase coverage, expand public programs, establish state purchasing pools to help low-income residents afford coverage, and institute important consumer protections by reforming the insurance market. However, the plans from the legislative leaders present a fairer blend of employer and individual responsibility and do more to ensure access to comprehensive care.

Mandating Coverage: The Schwarzenegger plan requires businesses with ten or more employees to provide coverage, or contribute 4% of their payroll to a state health care purchasing pool for the uninsured, roughly $1,600 for an uncovered employee earning $40,000 per year. A serious concern is what the state will set as the minimum benefit package required to avoid the assessment. Merely requiring high-deductible catastrophic coverage will do little to improve health and ensure people the health security they need. For uninsured employees and individuals, the plan calls for a burdensome individual mandate, which is the wrong approach to health care reform.

In contrast, the Democratic plans require greater fair share contributions for employers that refuse to provide coverage. Senator Perata would require all employers to provide coverage equal to a certain percentage of social security wages or pay a fee of equal value. Speaker Nunez would expand the employer mandate to firms with two or more employees and charge a fee based on a fair share percentage of payroll. Both plans from the legislative leaders limit the individual mandate to working individuals, who will mostly be receiving help from their employers. Workers without coverage would forfeit certain tax credits under Sen. Perata's plan or pay a fair share fee based on a percentage of income. In contrast to Schwarzenegger's plan, the Democratic proposals specify that benefit levels, particularly those involved in the new state purchasing pools, include comprehensive, primary and preventive care. This ensures a high level of quality health care that helps people be and remain healthy.

Expanding Public Programs: All three plans would expand Medicaid and SCHIP, but Senator Perata would make parents and children eligible for Medicaid and SCHIP to 300% of the federal poverty level ($60,000 per year for a family of four). This combined level of eligibility would be the highest in the country. Several states currently cover children through SCHIP to 300% FPL with New Jersey SCHIP eligibility at 350%. Minnesota has the highest level of parents eligibility at 275% FPL.

Insurance Market Reforms and Provider Fees: Significantly, each proposal would ban "medical underwriting" by insurance companies, requiring them to guarantee issue and community rate their products. These are important consumer protections which prevent insurance companies from refusing to sell people coverage based on a prior medical condition or charge them exorbitant premiums based on their health status. Additionally, Gov. Schwarzenegger would require insurance companies to spend at least 85% of their premium revenue on patient care, thereby reducing what is available for administration, marketing and profits.

To help fund his proposal, Schwarzenegger includes doctor and hospital fees that would be offset, at least in part, by increased Medicaid reimbursement. The plan, however, is facing early opposition from the provider community.

While there are important differences between these plans, the broad similarities between them means that enacting comprehensive reform in California this year is a great possibility.

More Resources

Growing Economy

by J. Mijin Cha

Real Time Electricity Metering: Shifts in Time Save Big Bucks

Here's a simple way for consumers to save nearly $23 billion a year in energy costs: just shift 7 percent of their electricity usage from a peak period (when everyone else is tapping the grid) to a less costly time. Run more washes at night -- when many power plants are currently idle -- and we can avoid building a lot more power plants to maintain excess capacity for during the day.

Chicago residents belonging to the Community Energy Cooperative are running a pilot program that is helping make these savings a reality. Instead of being charged a flat price for energy regardless of the time of day, they receive email alerts notifying them that energy capacity is being taxed to the limit and their electricity prices are set to rise above 20 cents a kilowatt-hour. Consumers can then alter their electricity consumption by running dishwashers at different times or lowering air conditioners -- and experience significant cost savings. "Smart metering" not only saves consumers money on their electric bill, it helps to stabilize energy production and consumption. The Chicago community program has been so successful that the Illinois legislature passed a law last year requiring the program to be expanded to 110,000 customers.

Power plant owners are not thrilled with smart metering because they make a huge profit from selling supplemental electricity needed when peak demand exceeds the supply. Reducing peak periods of demand would reduce the need for expensive generating stations that run only a few days, or even hours, per year. Smart metering is not a new idea, but the power-generating industry has successfully stopped wide-scale adoption of it.

As we reported in our October dispatch, the Pacific Northwest National Laboratory launched an even more ambitious regional initiative of new smart grid technologies. The project will give 200 homes real-time price information through a broadband connection. The connection will then automatically shift time of operation for dryers, water heaters and other appliances when the transmission system is under stress.

Smart metering is another easy step that states can take to help consumers save money, reduce unnecessary electricity production and lower stress on electric grids.

More Resources

Research Roundup

Raising Wages for Low-Wage Workers, High-Tech Immigration, and Googling Tax Subsidies

Some opponents of the minimum wage argue that Earned Income Tax Credit is a complete substitute. However, as a new Urban Institute report emphasizes, "raising the EITC enough to offset the loss in purchasing power of the minimum wage could prove costly," and the EITC system would have to be expanded to a far larger portion of working families to make up for the lost value of the minimum wage.

On the other hand, a new Brookings Institution report highlights a range of other policies that are important complements to the minimum wage for low-wage workers, including policies that crack-down on predatory lenders and other high-cost services preying on poor communities, providing better information to low-income communities so they can find cheaper products, and encouraging investment by mainstream companies in those communities.

Over the last decade, one in four high-technology startups for local economies have had a foreign-born founder, finds a new report by researchers at the University of California-Berkeley and Duke University. "What is clear," writes the authors, "is that immigrants have become a significant driving force in the creation of new businesses and intellectual property in the U.S. ”” and that their contributions have increased over the past decade."

With a market capitalization of $150 billion, you wouldn't think that Google would be receiving government handouts -- but as Good Jobs First finds, North Carolina and South Carolina have found themselves in a multi-million dollar bidding war to offer Google tax subsidies to locate a new facility.

Unfortunately such giveaways are chronic in most states; as a new report by the Iowa Fiscal Partnership found at looking at subsidies in that state, Iowa business receive about $155 million a year in tax benefits for economic development, but the state imposes little in the way of accountability -- so taxpayers don't even know if they are getting value for their money.

California: The Health Care Debate is On

California Health Access, 2007 Health Reform Debate

California Labor Federation, AFL-CIO, Analysis of Health Care Reform Proposals

Kaiser Family Foundation,

Real Time Electricity Metering: Shifts in Time Save Big Bucks

New York Times, "Taking Control of Electric Bill, Hour by Hour"

IL Legislature, IL SB1705, Real Time Electric Utility Pricing Law

Pacific Northwest National Laboratory

Progressive States Network, "Broadband for Economic Growth and Energy Savings"

Eye on the Right

Incoming Ohio Governor Ted Strickland had to spend his first day in office trying to quickly undo some damage from before his term. His predecessor, the embattled and deeply unpopular Bob Taft, had opted to let a nasty bill become law without his signature. The act shielded companies that defrauded customers from liability in court. It was passed without a hearing, without testimony, without any input from consumer groups because, as Plain Dealer consumer columnist Sheryl Harris put it, the legislators responsible "knew the bill couldn't possibly pass in the next legislative session." Lovely.

Jobs & Internships

Check out current opportunities with Progressive States on the Jobs & Internships Page.


The Stateside Dispatch is written and edited by:

Nathan Newman, Policy Director
Mijin Cha, Policy Specialist
Adam Thompson, Policy Specialist
Matt Singer, Communications Director


Please shoot me an email at if you have feedback, tips, suggestions, criticisms, or nominations for any of our sidebar features.

Matt Singer
Editor, Stateside Dispatch


Contact Us

Tell a Friend About the Dispatch!

Copyright 2006 Progressive States Network.

Tell a Friend About This Dispatch!



Sign Up

Contribute to Progressive States

To unsubscribe: Click here

Progressive States Network
101 Avenue of the Americas
4th Floor
New York, NY 10013