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Health Care Reform, A San Francisco Treat

Anthony Wright is executive director of Health Access California, the statewide health care consumer advocacy coalition. He blogs daily at the Health Access WeBlog and is a regular contributor to the Treatment. 

A little-noticed court ruling on Monday may actually be the San Francisco earthquake in the health reform debate that sends aftershocks felt around the country.
The full Ninth Circuit Court of Appeals upheld the San Francisco Health Care Security Ordinance, setting up a possible Supreme Court challenge about the city’s attempt at providing universal access to care--a possible model for the nation and many other states and counties.
Sponsored by then-Supervisor Tom Ammiano and signed into law by Mayor Gavin Newsom, Healthy San Francisco focuses on providing a new, affordable public option for both employers and individuals, based on a sliding scale. Those employers who provide private coverage now don’t have to do anything more, but those that don’t (with 20 or more workers) are required to pay a per hour, per worker fee--which gets their workers the public plan. Individuals can buy-in, up to five times the federal poverty level, regardless of pre-existing conditions. The new funds go to bolster the network of public providers that everybody relies on, and help those who need subsidy.
There are limits, given the constraints of the city’s jurisdiction: the provider network is strictly limited to providers within county limits. But Healthy San Francisco has been successful: this program has increased access to care for nearly two-thirds of the uninsured in San Francisco in only its second year in operation.
If this plan sounds similar to some of the federal health reform proposals being discussed, it is: It allows people keep the private coverage they have, but it expands public programs and options, sets some minimum requirement for employers’ contribution, and provides help to those who buy coverage as individuals--both through new subsidies and allowing people access regardless of health status. As the largest operational “pay-or-play” reform in the nation, there’s a lot for federal reformers to learn from San Francisco, and in many ways is a more relevant model than the much-discussed Massachusetts reform.
Healthy San Francisco also is a bellwether for state-level reforms. Given that over half of Americans get employer-based coverage, many observers for years believed that most state reforms were pre-empted by the federal law regulating worker benefits, ERISA. A recent Maryland case that required very large employers to contribute a specific percentage of payroll to health coverage was struck down--as the judges said, because the only reasonable way to comply with the law was for the employer (in practice, Wal-Mart) to change their worker benefit structure--which is prohibited by ERISA, which wants to allow multi-state companies to have a uniform benefit nationwide.
But the San Francisco law’s employer requirement is not just broader, but different, as the Appeals Court noted when rejecting the Golden Gate Restaurant Association’s lawsuit. The judges decided that the ordinance does not dictate specific benefits, because it provides employers choices in how to meet the requirement--such as paying into a public plan that would provide their workers access to care. In other words, an employer does not need to change its statewide or national benefits--it has other choices in meeting the San Francisco requirement. San Francisco is as good a test case as possible for the Supreme Court, which is where this case is headed.
If upheld, Healthy San Francisco shows a roadmap for other states and counties to follow with health reform, a path that California, Illinois, Pennsylvania, and other states have already been exploring.
In turn, the court ruling may have an impact on the national debate: those employers who don’t provide health coverage now and who may oppose health reform may be more willing to look again at the federal proposals, now that there’s a realistic possibility that without national reform, the some states and localities may well move forward by themselves.

--Anthony Wright