FoundSF

Historical Essay

by Tim Paulson

This article originally appeared in the Fall 2006 issue of the magazine Social Policy.

Healthy San Francisco ID card.

Outline of a Campaign

On July 20, 2006 the San Francisco Board of Supervisors voted 11-0 to pass the San Francisco Health Care Security Ordinance. This historic legislation, sponsored by Supervisor Tom Ammiano, was signed into law on August 7, 2006 by Mayor Gavin Newsom. The San Francisco Health Care Security Ordinance creates a Health Access Program that will offer comprehensive healthcare services to uninsured San Franciscans and their employers at a reasonable cost.

Supervisor Tom Ammiano and Labor Council head Tim Paulson on either side of bust of ILWU leader Harry Bridges, 2006.

Photo: courtesy Tim Paulson

The signing of this legislation capped a strategic campaign by the San Francisco Labor Council. The Labor Council, working closely with elected officials and community allies, orchestrated a year-long comprehensive campaign in order to accomplish two main policy objectives: providing access to health care for all uninsured San Franciscans and establishing a “fair share” health care spending requirement for large and medium sized employers.

Background

On November 6, 2004, 69 percent of San Francisco voters cast their ballots to pass Proposition 72—the statewide healthcare initiative that would have provided health care benefits to almost 2 million uninsured California workers. Prop 72 was on the ballot because corporations in California wanted to repeal Senate Bill 2 (SB2), legislation authored by San Francisco State Senators John Burton and Jackie Speier and signed by then-California governor Gray Davis. The legislation would have mandated core health care coverage to employees in companies that had fifty (50) or more workers. Corporations such as McDonalds and Wal-Mart poured millions into the campaign to repeal this legislation and the referendum went down by just less than 51 percent of the statewide vote.

Despite the loss statewide, it was clear the overwhelming majority of San Francisco voters were in favor of tackling the health care crisis in California and believed employers have a responsibility to cover hardworking employees. While the defeat was still fresh in San Francisco’s mind, the Labor Council sat down with Supervisor Tom Ammiano and set up some meetings with affiliate unions and health care advocates to explore enacting legislation similar to SB2 in San Francisco. We recognized that those of us who represent workers who have health care through collective bargaining need to exert our power to create at least a floor of coverage for those workers not protected by a union. In addition if a legislative campaign failed and we decided to go to the ballot, 69 percent of voters in the bank was a pretty good backup.

San Francisco Data

A key part of the success of our campaign was the assembling of a research team* that, among its duties, built legislation around sound, rational policy supported by as much current data as possible. A general lay of the land revealed that there are currently 82,000 uninsured people in San Francisco. Of these, 43,000 are employed and almost 20,000 work for businesses with 20 or more employees. There was also recognition that responsible employers who provide health insurance are being undercut by those who don’t. As in the rest of the country, rising health care costs were leading to an ongoing reduction in employer sponsored coverage, which fell by 5% for Californians under 65 between 2001 and 2006. Increased un-insurance shifts costs onto an already over- burdened public health- care system in the county.

Legislation Drafted

Late in 2005 the Board of Supervisors sponsored a health care hearing and Supervisor Ammiano introduced the first draft of the employer mandate legislation. At the outset we had five other co-sponsors, a simple majority of the board of Supervisors. The bill was sent to the Budget Committee for further amendments and hearings and parked there for months as we pursued our campaign for, not only more Supervisor votes, but deeper consensus throughout the community. Our calendar was also circled with late summer deadlines for putting the legislation on the November 2006 ballot. From there we determined the latest date we could pass legislation through the board, and give the mayor time to sign or veto the legislation before pulling the trigger and going to the ballot. We would need eight votes to override a mayoral veto.

Universal Health Care Council

By the end of January our coalition was fully engaged in the campaign. The policy team was tightening up the legislation; unions and community partners were lobbying Supervisors and the Mayor; we convened town halls, organized rallies and press conferences to gain support for the legislation. By early February we had seven votes and were poised to bring the legislation to a full board vote.

In mid-February the mayor intervened. Knowing that the legislation would pass—veto-proof or not—he called for a recess by appointing a forty-member blue ribbon Universal Health Care Committee (UHCC). The committee members included labor, business, health care, non-profit and academic leaders and were tasked with studying the uninsured in San Francisco and issuing a report within 100 days. And we did.

The committee played an important role in building consensus for action to expand health care in San Francisco, and raising expectations that it could be done.

San Francisco Health Access Program

The Universal Health Care Committee proposed the creation of a Health Access Program that would provide comprehensive care to uninsured San Francisco residents at an affordable cost. Services would be provided through the city and county public health system, along with the city’s non-profit providers and hospitals. The plan, proposed by the Director of Public Health, Dr. Mitch Katz, would essentially reorganize the cities programs for the uninsured by providing enrollees a medical home with a primary care provider. Emphasis would be placed on preventative care and chronic disease management, but members would have access to a range of services, including prescription drugs and hospitalization. The program provides health access, NOT insurance. It covers only San Francisco residents and does not cover services out of network or out of county.

An actuarial study of the cost of the health access plan as outlined above was $200 per member per month, if all 82,000 were to enroll, the cost of the program would be $200 million a year. San Francisco was already spending over $100 million a year on the uninsured through the public health care system. While the committee called for participation by employers, workers and the county in financing the program, how the funding gap would be filled was left to the political process.

Employer Spending Requirement

While the Universal Health Committee worked to develop the health access plan, the labor-community coalition continued to work with the Board of Supervisors to draft legislation for an employer health spending requirement that could serve to help level the playing field for employers who provide health care and fill in an important piece of the funding gap for the health access program.

The final mandate piece of the legislation requires that medium-sized and large employers spend a minimum amount per hour on health care for their employees. Companies with 100 or more employees will be required to pay $1.60 per hour. Employers with 20-99 employees will pay $1.06 per hour. And they will pay on all hours for those employees who work more than 8 hours per week. These hourly fees are indexed at 5% for three years and then will be linked to a market index of the largest-10-counties-in-California health care survey. The benchmark fees of $1.60 and $1.06 were based on approximately 75% and 50% of the of the market cost of these benefits. Paying into the Health Access Program is one way that employers can meet the spending requirement.

The Legislation

At the dissolution of the UHCC while the business community supported the Health Access Program, they opposed the employer spending mandate. As an alternative, they proposed an increase in the business license fee that would have put most of the cost on small businesses. We made a number of attempts to negotiate with the business groups, but they ultimately pulled out of the conversations.

Photo: courtesy Tim Paulson

Following a concerted campaign on the swing board members we had moved from a solid 7 co- sponsors on the board to a veto-proof majority of 9. At that point we made a strategic decision to combine the two pieces of legislation into one—combining the Health Access Plan with the Health Care Spending Requirement. (We always knew that the HAP would never be financially viable without the mandate. We also knew that without market indexing of the rates employers would start dumping private health plans.) The two parts would have to go up or down together. The legislation finally passed 11-0.

Replication

San Francisco had two major advantages in creating the Workers Health Care Security Ordinance. First it started with a strong health care infrastructure and significant resources in the public health system that could serve as the backbone for the health access plan. Second, San Francisco is a city and a county, which allowed it to combine the powers of both. Any attempt to replicate the plan would have to be based on the local conditions in that community. Nevertheless, the San Francisco experiment provides a demonstration that health care reform can be achieved if the political will is there to do it.

Last Word

A smaller committee than the UHCC has been appointed to implement this plan which will begin rolling out on July 1, 2007. A strong labor-community coalition, including ACORN, was at the heart of the effort to pass the legislation. The role the Mayor’s Universal Health Care Council played was vital for building consensus around the need and opportunity for change, even if it left important questions unanswered.

San Francisco has taken an important action to help stop the race to the bottom on health benefits, we are expanding access of uninsured residents to preventive care, and perhaps most importantly, San Francisco has demonstrated that change in our health care system is possible, if there is the political will to achieve it.

Addendum

• This team included the policy director for SEIU-United Healthcare Workers West, the research director for UNITE-HERE Local 2, a lead researcher at the University of California, Berkeley Center for Labor and Research (who was responsible for crucial study on the effect of WalMart’s workers dependence on public health systems) and staff of Senior Action Network, a large progressive senior non-profit.

Coalition Members: San Francisco Labor Council SEIU • UNITE HERE OPEIU ACORN • Senior Action • Network Young Workers United • Bay Area Organizing Committee Health Access • Health Care for All

Tim Paulson [was] executive director of the San Francisco Labor Council. The Labor Council represents 100,000 working men and women from over 150 affiliate unions. He was a member of Mayor Gavin Newsom’s Universal Health Care Committee.

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Excerpted from Forty Years of Making ‘Good Trouble’—The Selected Writings of a San Francisco Labor Leader © Tim Paulson, 2021

First published in the U.S. by Senders Communications Group, 16501 Ventura Blvd. #400, Encino, CA 91436