Wal-Mart joins coalition in health care push Business leaders, including Wal-Mart Stores, announced Wednesday that they are joining forces with labor to campaign for health care reforms, with the goal of providing affordable health coverage for all U.S. citizens by 2012. "This is about engaging leaders at all levels to bring about real and meaningful change to the health-care system," a Wal-Mart spokeswoman said of the partnership. Bloomberg/ClipSyndicate (2/8), Wall Street Journal, The (2/8)

	Designed specifically for retail professionals, NRF SmartBrief is a FREE daily e-mail newsletter. It provides the latest need-to-know news and industry information that maximizes your time, giving you an edge over your competition. Sign up for your very own free subscription to NRF SmartBrief.

By Jim Hopkins, USA TODAY

SAN FRANCISCO — Fed up with rising labor costs, a new generation of entrepreneurs is launching millions of tiny companies differing from business in the past: They don't want employees.

The trend, building since the late 1990s, hit a milestone this year when the number of these microbusinesses reached 20 million — one for every six private-sector workers, a new analysis of government data shows.

In place of paid employees, owners harness new technologies to outsource work, often linking up with other like-minded entrepreneurs to get jobs done in a virtual assembly line spanning the globe.

http://www.usatoday.com/money/smallbusiness/2006-12-10-micros-usat_x.htm

Angels group invested $5.8 million in '06
A group of Seattle-area angel investors plans to announce today that it funded more fledgling companies last year than in any other period...

From: Kuehl, Sheila [mailto:Sheila.Kuehl@SEN.CA.GOV]

This is my second essay for 2007. After my first essay, delineating the four different proposals on health insurance coming to the California Legislature this year, I received several requests to further describe the Governor's proposal.

This essay sets forth the elements of his proposal, including recent changes described by his staff, which have not been reported in the press. Visit my website at www.sen.ca.gov/kuehl to read my previous essays.

For those of you who received this essay by forwarding, it is written by California State Senator Sheila Kuehl. If you wish to subscribe to receive these essays on a continuing basis, (no charge), please send an e-mail to Sheila.Kuehl@sen.ca.gov, titled "subscribe". If you receive it directly and wish you didn't…..send an e-mail to the same address, but title it "unsubscribe".

Reality vs. Press Releases

The Governor has consistently described his proposal as "universal healthcare", promised it would cover all of California's children, and indicated that everyone---doctors, hospitals, businesses, insurance companies and consumers---would have "shared responsibility" in paying for the plan. The press has dutifully repeated his phrases, in almost every case without a modicum of analysis. The details of the proposal reveal quite a different picture.

The Bottom Line of the Governor's Proposal: Individual Mandate

The central basis of the Governor's plan is simply to mandate that every Californian must, by law, carry health insurance. There is no requirement that it be affordable and no minimum coverage. This means that the requirement can be met by a bare-bones policy covering only catastrophic events, with a $5,000 deductible and up to $7500 in out of pocket expenses for all the things that aren't covered by the policy.

This is not universal health insurance. Think for a moment about automobile insurance. Even before Prop 103 passed, limiting the amounts by which insurance companies could raise your auto insurance premiums to those approved by the Insurance Commissioner, we all had to have auto insurance. Would you call it Universal Auto Insurance? 25% of Californians don't comply --- so many that we all have to carry Uninsured Motorist Insurance, in effect paying more for those who are uninsured, just as the Governor has suddenly discovered we do in the area of healthcare.

His proposal would simply continue this problem in the much more complicated and important area of health insurance, with no controls on raises in premiums and no requirement for comprehensive or even adequate coverage, so every Californian could be required to pay high premiums, high deductibles, high co-pays and high out of pocket expenses, for very little coverage.

Employer Mandate only on 20% of California employers

Conservatives in the Legislature have focused fiercely on what they call an employer mandate. But the Governor's plan requires only those California businesses that employ 10 or more to provide minimal coverage to their employees or to pay 4% of their payroll into a central government fund, which would then subsidize the purchase of private insurance by their employees. Only 20% of California businesses employ more than 10 people. Of these, 80% are already providing some health insurance to their employees, at a cost of 9-11% of payroll. In a way, this is an invitation to businesses to reduce what they pay for health insurance for their employees. 4% of the payrolls of businesses with more than 10 employees would not be sufficient to provide healthcare for their employees. With a limit on what the businesses pay, but no limits on what employees pay under the mandate, even more of the premiums, co-pays and costs would devolve on employees than they do now.

Employees of businesses with fewer than 10 employees would be required, under the individual mandate mentioned above, to buy insurance for themselves and their families. Their employers would not be required to do anything.

Scope of Coverage Minimal

The Governor's proposal does not establish any minimums for the coverage benefits that must be offered. As a matter of fact, in a recent addition to the presentation of his proposal, the Governor called for more "flexibility in insurance underwriting" and repeal of "excessive government regulation". This means he would like to roll back even the most minimal requirements now in the law for coverage but still require everyone to buy policies and pay whatever premiums are charged.

This is not "cost-containment" as the Governor has indicated. This is actually allowing the insurance companies to sell inadequate coverage to those who wish to gamble that they won't need it, but are required to buy something to comply with the law.

Cost Containment Proposals

The Governor's proposal contains no real cost containment measures. It merely shifts the cost of unlimited premiums onto consumers. The proposal attempts to label the fact that he would allow insurance companies to offer greatly reduced coverage as "cost containment".

In addition to simply requiring less coverage, the Governor also proposes to limit insurance company overhead to 15%, mirroring a bill I carried last year which died under insurance company lobbying. This means that the companies must pay out 85% of their premiums to providers, which could help provide more adequate reimbursements to providers. It does not, however, affect the cost of healthcare.

Additionally, the Governor puts off seismic retrofit of hospitals again.

Low Income Californians

The Governor has indicated he wants to provide subsidies to help families with incomes below 250% of the federal poverty level ($32,000 for single parent with one child, $50,000 for family of four) fulfill their mandate to buy private insurance. They would pay up to 6% of their income for the coverage by law, which, for some, is significantly higher cost sharing than they might be paying now as Medi-Cal beneficiaries. Families with incomes slightly above the level would be required to buy insurance without subsidies.

Children

The Governor has indicated he would like to see all California's children covered by insurance. Under his proposal, families would be subsidized as described above, up to a certain level of income. Above that, children would be covered by the requirements on adults to buy insurance.

Guaranteed Issue

Many have praised the Governor's proposal to require insurance companies to cover all applicants, regardless of pre-existing conditions or prescribed medications. The proposal also indicates there would be limits on how much those with pre-existing conditions could be charged. It does not, however, address the fact that the insurance companies would likely raise their overall premiums to cover the new risks they would be required to assume.

"Community Rating vs. Modified Community Rating

Related to guaranteed issue, in a way, is "community rating" because a strict "community rating" system means that everyone in a geographic area is taken into account in setting premiums and all in that area share the risk. Although it does prevent one person in a pool from shouldering the burden of their own condition, it is still a gentrified form of "redlining," as area residents in one location would all be in a pool.

The Governor's most recent explanation of this section of the proposal, however, could potentially exacerbate the problem by adopting a "modified" community rating system that would allow the private insurance companies to differentiate in premiums on the bases of age, gender and regionalized location. A strict "community rating" system would not allow these differentiations, so, at the very least, some clarification is needed.

Medi-Cal Reimbursements raised to Medicare levels

Payments to doctors and hospitals would be higher if the federal government agrees to the raise. For all those not on Medi-Cal (California's coverage for the poor), however, there would be no requirements concerning the level of payments to healthcare providers made by private insurance companies.

Provider fees (or taxes, according to some)

Hospitals would be required to pay 4% of their gross revenues into the same fund as large employers to help subsidize insurance for the poor. Physicians would be required to pay 2% of gross revenues. Logically, this means that, should doctors and hospitals raise their fees to adjust for these taxes, the sick would be paying a disproportionate share of subsidizing health insurance for the poor.

Hospital Funds Redirected to Insurance Companies

The Governor's proposal takes most of the money now directed to hospitals to pay the costs of caring for the indigent and uses it to buy insurance for the indigent. Such a shift could actually lessen the money actually spent on indigent care as insurance company overhead is allowed, under the Governor's proposal, to be as high as 15%. (In most companies, it's now as high as 30%).

Prevention, Health Promotion and Wellness

The Governor's proposal requires Medi-Cal, Healthy Families, health plans and insurers to offer a health benefit package that provides incentives for healthy behavior, such as gym memberships or Weight Watchers programs. It also proposes ways to improve health status and reduce risk factors in programs related to diabetes, medical errors, obesity and tobacco use.

What Happens Now?

The Governor's proposal is seeking a legislative author. When one is found, a bill will be introduced, either in the Senate or the Assembly and will be heard by the Health Committee in that House, the fiscal committee, go for a Floor vote and start all over in the other House. There will be heavy negotiation between the Speaker of the Assembly, the President of the Senate and the Governor as to any legislation to be adopted in this session. At the same time, my single payer bill, SB 840, will be reintroduced and follow a similar, but parallel, track.

Stay tuned and stay informed.

Bush health plan would gut current coverage: critics

WASHINGTON (Reuters) - U.S. President George W. Bush's proposed health-insurance plan will raise taxes while helping only a few people, and may eviscerate existing coverage, critics said on Wednesday.

As Card Fees Climb, Retailers Push PINs
Fed up with the rising cost of accepting plastic, more merchants are taking matters into their own hands and encouraging customers to pay using methods that carry low transaction fees, in particular PIN-based debit cards.

by California State Senator Sheila Kuehl. If you wish to subscribe to receive these essays on a continuing basis, (no charge), please send an e-mail to Sheila.Kuehl@sen.ca.gov, titled "subscribe". If you receive it directly and wish you didn't…..send an e-mail to the same address, but title it "unsubscribe".


First, A Few Factoids about California and Healthcare



One in five Californians has no health insurance at all and most of these people are average working people. Usually, their employer is one of the many who does not provide healthcare coverage and they don't make enough to pay for an individual policy for them and their family.



Of those Californians who do have insurance, many are underinsured and are very surprised to discover that their insurance doesn't cover a large chunk of their costs if they get sick or injured. In fact half of all the personal bankruptcies in America are caused by medical costs and three-quarters of those bankrupted had insurance at the time they became ill or injured.



People are also very worried about losing the insurance they might get at work because employers are, more and more, cutting back on health insurance and other benefits and, of course, losing or changing your job means losing your insurance.



Plenty of money is being spent on healthcare-one out of every six dollars spent in America, it's just not spent to cover everyone. And, while spending generally has risen by 7.5%, insurance premiums have gone up by double-digits every year for the last five. Wages have increased only 1.7%. Costs are getting shifted to patients and physicians are not getting reimbursed for their work.



In order to save money, insurance companies deny claims and treatments, narrow provider networks, exclude more and more people for "pre-existing conditions" or because they take certain kinds of prescription drugs (most of the most popular ones) or work in a particular field.



A Field Poll commissioned by the California Wellness Foundation revealed that 80% of Californians want the government to guarantee access to affordable healthcare coverage. When asked why healthcare costs are increasing, the majority pointed to excessive insurance company profits, followed by waste, fraud and inefficiency.



Four Healthcare Plans In Legislature



Finally, this year, healthcare is getting a lot of attention in Sacramento. As Chair of the Senate Health Committee, I am committed to working with all stakeholders: the Governor, the Legislature, medical professionals, labor, business and consumers--to work out whatever incremental reform measures can be developed for this session, at the same time as the Legislature and I continue to work on the universal healthcare bill I have authored for the past four years.



In February, I will reintroduce the most comprehensive solution to the current health care crisis, Senate Bill 840. SB 840 is the only proposal that establishes universal, affordable, comprehensive health insurance for all Californians and that guarantees the right of each patient to choose his or her own doctor. SB 840 replaces insurance companies with a state-wide trust fund that collects premiums paid by employers and individuals, sharing the responsibility for funding. This reduces the administrative portion of California's healthcare costs from nearly 30% to under 10%. With everyone in one risk pool, no one is denied coverage for a so-called pre-existing condition. Consumers are free to change jobs; start a business; go to school or start a family without losing the doctors they trust. The Governor says currently that he will not sign a universal insurance bill. Nevertheless, the Legislature will continue to develop the plan as the only long-term, universal solution to the health crisis that is going to quickly outgrow any short term incremental reform.



There are three other developing short term plans to be considered this session. Each has its virtues and a number of problems. The outstanding questions that must be resolved by any meaningful short term reform proposal are: will middle-class consumers who cannot now afford health insurance or qualify for Medi-Cal get the quality coverage they need; and will hospitals and doctors see any relief from the burdens that are putting so many of them out of business?



Proposal by President of the Senate



State Senate President pro tem Don Perata's Senate Bill 48 would cover Californians who are employed, as well as their dependants. Employers could either spend a percentage of their payroll toward employee health insurance or pay an equivalent amount into a health care trust fund. The fund would then buy a few insurance plans from private insurance companies, and uninsured employees would be required to pick one. Insurance companies wanting to offer coverage through the fund would be required to restrain administrative expenses and provide a basic level of benefits. Working individuals would be required to purchase coverage for themselves and their dependants. The plan also expands children's eligibility for existing public programs. The bill does not indicate if all employees must be covered when employers provide the insurance, nor what basic coverage is required, which could leave many workers without coverage and mandated to buy it themselves. The bill is still sketchy and will be worked on throughout the year, along with the two set out below.



Proposal by the Speaker of the Assembly



Assembly Bill 13, by Assembly Speaker Fabian Nunez, covers employees and their dependents through a purchasing pool of fees paid by employers that have two or more employees and do not offer health care coverage. This pool buys healthcare coverage from private insurance companies. Workers offered coverage from their employers would be required to accept coverage for themselves and their dependants unless premiums and out-of-pocket costs exceed a certain level of income, in which case they can buy their insurance from the pool. The money paid for premiums would be pre-tax dollars. Individuals and the self-employed could buy in to the pool, which would offer a choice among several plans, each of which must provide at least a minimum set of benefits. Lately, there has been a proliferation of so-called "basic" plans, so minimal they are really a sham, requiring huge deductibles; offering no pregnancy coverage, and offering very low hospital reimbursement rates. Both legislative proposals would try to set a floor for benefits from employers and from the pool. Again, affordability, funding and coverage issues remain to be worked out.



Proposal by the Governor



The foundation of the Governor's plan is a mandate requiring every Californian to have health insurance. The proposal would allow, and even encourage, the proliferation of bare-bones plans with deductibles as high as $5,000 as well as requiring patients to spend an additional $7500 for procedures refused by their insurance company. This very troubling proposal does not at all address how plans will be affordable or adequate for Californians who are mandated to buy them, nor who will pay for uncovered procedures above the $12,500 ceiling. In addition, every employer is required to spend 4 % of payroll to buy insurance, either from insurance companies directly or through a state fund. This percentage of payroll is not actually sufficient to purchase insurance for the working uninsured and there is no limit to what employees would pay, no cost control and therefore, no premium control.



The Governor, like Sen. Perata and Speaker Nunez, would use public monies to cover all children living in families earning less than 300% of the Federal Poverty Guidelines (about $39,000 for a single parent with one child or $60,000 for a family of four) by buying insurance, again from private companies. No plan details exactly how the rest of California's uninsured children would be covered. He also calls for significantly increasing reimbursements paid to providers under public programs by billions of dollars.



Under the Governor's proposal, a portion of the funding for all of this would come from a tax on providers such as doctors and hospitals, as well as hoped for increases in federal monies. Additionally, the Governor would take money now paid to hospitals to treat indigent people and redirect it to private insurers to buy insurance for the poor. This creates an immediate problem for hospitals which are already closing at alarming rates due to inadequate reimbursements from private insurance companies along with the cost of caring for the uninsured.



Finally, the Governor would adopt President Bush's plan for individual "Health Savings Accounts" by requiring employers to "allow" employees to put away money, pre-tax, to pay for unreimbursed medical expenses. Health Savings Accounts effectively enable insurance companies to shift the costs and liability of healthcare away from them and on to consumers. Such a plan will not benefit people who are already too strapped to meet current expenses and it does nothing to expand coverage or affordability.



Actions in 2007



This year, and perhaps the next, the Legislature will work out some compromise measures as between Sen. Perata's plan, the Speaker's plan and the Governor's plan. At the same time, we will continue to work on the long-term solution which must be universal, affordable, comprehensive in its coverage and protect choice of providers and quality. So far, that's only SB 840. Any incremental legislation must surely move us in that direction and, at the very least, Do No Harm.