Appeals Panel Allows City To Begin Healthy San Francisco Program, Implement Employer Fees

Main Category: Health Insurance / Medical Insurance
Also Included In: Public Health;  Medical Malpractice / Litigation
Article Date: 11 Jan 2008 - 12:00 PDT

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A three-judge panel of the Ninth Circuit Court of Appeals on Wednesday granted a temporary stay of a district court order and allow San Francisco to move forward with its universal health coverage program while the city appeals a legal challenge of the ordinance, the New York Times reports (McKinley, New York Times, 1/10).

Under the law establishing Healthy San Francisco, private employers with at least 20 employees and not-for-profit groups with at least 50 employees must provide health care benefits at a cost that meets minimum spending levels or help cover the cost of the Healthy San Francisco program. Other funding comes from tax revenue and member premiums. The program is intended to ensure access to health care services at San Francisco clinics and the city's public hospital for San Francisco's 82,000 uninsured residents.

U.S. District Judge Jeffrey White last month ruled that the employer spending provision violated the 1974 federal Employee Retirement Income Security Act (Kaiser Daily Health Policy Report, 1/4). However, Circuit Court Judge William Fletcher on Wednesday said the city had a "strong likelihood" of winning the case. Fletcher, along with the two other judges, wrote that "the balance of hardships tips sharply in favor of the city," adding "that the public interest would be served by a stay" (New York Times, 1/10). According to Fletcher, "avoidable human suffering, illness and possibly death will result if a stay is denied."

Final written arguments in the case are due in April, and a ruling is possible as early as summer or fall, the San Francisco Chronicle reports (Egelko, San Francisco Chronicle, 1/10).

Reaction
The suit was brought by the Golden Gate Restaurant Association. Daniel Scherotter, incoming president of the association, said the city's program is "expensive, it's unsustainable and there's better ways to do it" (New York Times, 1/10). Stacey Leyton, a lawyer for a group of labor unions that joined in the suit on the side of the city, said, "It's a tremendous victory for those who want to see the state do something in this area."

According to the Chronicle, "the court's attitude makes it more likely" that a California state proposal would survive a legal challenge (San Francisco Chronicle, 1/10). The state legislation -- which has passed the state Assembly and is supported by Gov. Arnold Schwarzenegger (R) -- along with a planned ballot initiative, includes an employer requirement that ranges from 1% to 6.5% of their payrolls, depending on the level of payroll (Kaiser Daily Health Policy Report, 1/2).

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