Get the Facts!

Index:

1. California Health Care Reform: Talking Points for the Arts
2. Time Line for California Health Care Reform

California Health Care Reform: Talking Points for the Arts

California has the opportunity to reform the way health care is delivered in this state.  The Assembly and the Governor are committed to changing the system in order to make it more accessible and affordable to everyone, especially the nearly 7 million people in California who currently don’t have health insurance.  However, they are at a political impasse and the prospects for meaningful reform are in jeopardy.  With costs continuing to rise out of control – 87% since the year 2000 – something must be done now. (For a PDF version of this document, click here)

Economic Impact – California’s arts industry is a critical part of the state’s economy.

• The arts add some $5.4 billion to the state's economy and nearly $300 million in state and local taxes
• The arts support more than 160,000 jobs and are the equivalent of 10,000 small businesses
• The arts have grown economically by 152 percent since 1994
• California ranks as the nation's leader in arts-related businesses and more people employed in the arts

Health Care and Insurance –The vast majority of Californians with insurance obtain it through their employer. Many artists are self-employed, leaving most of them to purchase individual coverage, which is prohibitively expensive.

• Artists are four times as likely to be self-employed (46% of the employed artists are self-employed compared to 10.5% for the general population).
• 51% of artists pay for their own health insurance, compared with 8% of other workers
• Most arts organizations are small, community-based nonprofit organizations with limited budgets and few full-time employees, making it difficult for them to offer employees health insurance.  
• Although there are strong labor unions for artists in California, health insurance coverage is only offered to artists who are consistently earning a majority of their income from their work (e.g., 70% of Screen Actors Guild members do not qualify for the union’s group health insurance).

Imperative #1:  Access – Research has shown that access to health insurance results in substantially higher health outcomes.  Therefore, health care reform must include:

• Guarantee Issue ­– Currently, health insurance companies can deny coverage for pre-existing conditions.  Health insurers must be required to offer coverage regardless of such conditions.
• Portability – Artists often have multiple part-time and seasonal jobs, so reforms should include a way for those workers to keep their same coverage even as their employment situation changes over time.
• No “Lifetime Maximum” – Some health plans currently only cover a policyholder up to a certain point before they stop paying claims.  This should be eliminated.
• Full Service – Health coverage should include access to all services including those for physical, mental and emotional health, as well as disease prevention and wellness programs.
• Group Coverage – The leading proposals include creation of a state-sponsored “pool” or group coverage for those who are not offered coverage by their employer.  It is critical that the self-employed be eligible for group coverage through this pool rather than being forced to buy individual plans.

Imperative #2:  Affordability – Proposals offered by the Governor and the Assembly include provisions to ensure that Californians are only paying as much as they can afford for their health insurance, but there is substantial disagreement on where this threshold lies.  Key issues for artists:

• Cap Expenses – The cap on what percentage of income is to be spent on health care should be capped at a reasonable level, likely to be in the range of 5%.
• Reasonable Deductibles – Deductibles of $5,000 or more before coverage begins is unacceptable.  A more realistic deductible is approximately $2,000.
• Calculating Income – Many artists do not derive a substantial portion of their income from their work, but have significant expenses related to the pursuit of their craft.  Therefore, determination of income should be based on “Adjusted Gross Income” to account for these expenses.
• Tax Savings – Self-employed artists should be given the ability to use the same special accounts employers use that grant them a tax deduction for health-related expenses such as premiums and out-of-pocket costs.

Time Line for California Health Care Reform

(For a PDF version of this document, click here)

January 8, 2007: Governor Schwarzenegger announces his proposal for health care reform, and declares 2007 as the year for health care reform in his State-of-the-State address to the California legislature the following day.

February 27, 2007: Senator Sheila Kuehl, chair of the Senate Health Committee, re-launches Senate Bill 840 (SB 840), which has more than a dozen co-authors; the bill will create a single, universal, health insurance pool.

April 18, 2007: The CA Senate Health Committee hears and passes SB 840 (Kuehl).

April 24, 2007: The CA Assembly Health Committee hears Assembly Speaker Fabien Nunez’s Assembly Bill 8 (AB 8), which passes the Assembly.

April 25, 2007: The Senate Health Committee hears Senate President Pro Tem Don Perata’s Senate Bill 48 (SB 48) for the first time and clears the bill.

June 21, 2007: Assembly Speaker Fabian Nunez and Senate President Pro Tem Don Perata announce at a Capitol press conference that they are merging their two health reform bills, AB 8 and SB 48, respectively, into one bill, AB 8 (Nunez/Perata).

July 11, 2007: AB 8 (Nunez/Perata) passes Senate Health Committee.

September 10, 2007: AB8 (Nunez/Perata) passes the California Assembly on the second to last day of the legislative session.

September 14, 2007: Governor Schwarzenegger states he cannot sign AB8 in the form in which it was passed and calls the Assembly into Special Session in order to work out a compromise, rather than veto the bill.

October 9, 2007: Governor Schwarzenegger releases the details of his own detailed legislative proposal to reform the state’s health care system in response to legislators’ requests for this information.

October 12, 2007: With no Special Session compromise in reach, the Governor vetoes AB8 (Nunez/Perata).

October 31, 2007: The Assembly Health Committee vets over Governor Schwarzenegger’s health legislation, although no vote is cast as no legislator agreed to author the proposal for it to become a bill. Nunez announces intent to vote on a new health care bill by November 26, 2007.

November 6, 2007:  Assembly Speaker Fabian Nunez and Senate President Pro Tem Don Perata unveil their new proposal for health care reform, which makes significant moves to compromise with the Governor’s proposal in an effort to get a bill passed this year.

December 17, 2007: AB X1 1 passes the California State Assembly; Governor Schwarzenegger, with Assembly Speaker Fabien Nunez by his side, speaks of his support of AB X1 1 at a news conference. Senate President Pro Tem Don Perata, however, questions whether this is the right time to pass such an expensive reform with the recent news of a $14 billion deficit for the fiscal year.

January 28, 2008: The Senate Health Committee voted 7-1 against AB X1 1; Senate President Pro Tem Don Perata initially decided to delay the Senate vote until January 16, 2008, pending more financial analysis of the bill and its impact on the state’s projected $14.5 billion deficit. The vote was again delayed until January 24.

June 18, 2008: SB 1522, AB 1945, AB 2967, in addition to several other bills that regulate the health care industry, all pass out of their respective houses.