Healthy San Francisco program prompts some companies to shift costs to consumers but appears effective

The Healthy San Francisco program has prompted some employers to increase prices and hire fewer new employees but also is "showing early signs of doing what it was intended to do: push employers to defray medical costs for more workers," the Wall Street Journal reports (Dvorak, Wall Street Journal, 5/5).

The program seeks to ensure access to health care services at city clinics and the city public hospital for the 82,000 uninsured residents. Under the program, which began on Jan. 9, private employers with at least 20 employees and not-for-profit groups with at least 50 employees must spend a certain amount on health care. The Golden Gate Restaurant Association has filed a lawsuit against the city over allegations that the program violates the federal Employee Retirement Income Security Act. The Ninth U.S. Circuit Court of Appeals heard the lawsuit last month (Kaiser Daily Health Policy Report, 4/18).

According to the Journal, the program "has forced businesses with big populations of uninsured workers to adjust," as some restaurants estimate the added costs will cut into profit and some employers have begun "passing the cost on to customers -- with varying degrees of subtlety." However, "public health experts say San Francisco's ordinance is making headway," as about "18,000 people -- one-quarter of the uninsured -- have enrolled in the city's health services program, and local businesses are seeking ways to cover health-care costs for hard-to-insure workers," the Journal reports.

Larry Levitt, a vice president at the Kaiser Family Foundation and editor-in-chief of kaisernetwork.org, said, "They've made more progress than anyone expected." In the event that the city wins the lawsuit, other localities might look to implement similar programs, he said (Wall Street Journal, 5/5).

Enrollment Numbers

More than 700 businesses last week signed up for Healthy San Francisco, the San Francisco Chronicle reports. According to the Chronicle, more than half of the businesses' 12,900 employees are eligible for the program, and ineligible employees qualify for a health care reimbursement account, which is funded by employers and reimburses workers for medical expenses. The enrollment wave came as businesses with 20 to 49 employees reached the deadline on Wednesday for meeting a city-mandated minimum-spending requirement on health care for their workers, which could be met by workers' enrollment in the program.

San Francisco Mayor Gavin Newsom said, "There are still businesses that are not participating, and we want to get them to participate, to get engaged and not look at this as something that is punitive and harmful, but instead something extraordinary and historic." Supervisor Tom Ammiano, who designed the program with Newsom, said enrollment numbers are proof that the program is working. He said, "This is what was supposed to happen and this is what happened." Newsom said the program could become a model for local governments nationwide.

There are 19,000 people enrolled in the program. A total of 734 employers in the city participate in Healthy San Francisco (Buchanan, San Francisco Chronicle, 5/2).