S.F. Legislators Approve $400K Gift to Insurers. Will Governor?

By Matt Smith Wed., Aug. 25 2010 at 12:59 PM

Categories: Government

It's unanimous: let's screw San Francisco

In a year when San Francisco faces a $787 million budget shortfall, how do our representatives in Sacramento propose to help out? By unanimously supporting a measure transferring $400,000 annually in health care expenses from insurers to local San Francisco taxpayers.

The bill, now awaiting the governor's signature, is called the
William "Dallas" Jones Cancer Presumption Act of 2010, and is the subject of this week's "Matt Smith" column. It would compel workers' compensation officials to presume that firefighters and police officers who get cancer long after they retire became sick because of work. Current law provides that workers' comp officials assume any police or fire retiree who contracts cancer within five years of leaving the job became ill because work-related matters. Under the new bill, that period would extend to 10 years.

So if chain-smoking cops develop lung cancer nine years after leaving the job, the government will have to pay their workers' comp health care costs. And thanks to the specific way San Francisco funds retiree and workers' compensation health care, the bill may end up letting insurers off the hook for health care costs, sticking local taxpayers with an estimated $400,000 yearly bill instead.

The bill's sponsor, San Jose Assemblyman Joe Coto, knows all about suckling at the state teat. Before being elected to the Assembly, Coto was superintendent of the East Side Union High School District in San Jose. He's retired from that job, and now draws a $178,000 annual state pension. Given an Assemblyman's base pay of $116,208, Coto's apparently pulling down $294,208 in state government income.

In San Francisco, the effect of Coto's bill would be particularly pernicious, possibly benefiting insurance companies even more than patients. That's because San Francisco takes care of retirement benefits through health insurance companies, paying $717 per month on average in premiums with retirees contributing $117 per month.

For workers' compensation health care, however, San Francisco "self-insures," meaning costs come out of the same city general fund that endows parks, roads, and, yes, healthcare for people not fortunate enough not to be generously pensioned firefighters and cops.

So if the governor signs this bill, and retired police and fire cancer victims make additional workers' compensation claims, the city must pay directly for that health coverage. That lets insurance companies off the hook for care that normally would be covered by retirement health insurance plans.

The city currently pays $783,000 annually for workers' compensation cancer claims for public safety employees and retirees. Cost estimates obtained as the result of a public records request suggest these payments would increase by more than 53 percent if the Cancer Presumption Act becomes law.

Multiplying 53 percent by $783,000 suggests the city might incur more than $400,000 in additional annual costs if Gov. Schwarzenegger signs this bill. As of last week, the governor told The Snitch he hadn't yet taken a position.

Elsewhere, public officials have blanched at the additional expense. The cities of San Marcos, Santa Rosa and Vista came out in opposition to the bill, as have the California State Association of Counties and the League of California Cities.

But San Francisco has been silent.

Tony Winnicker, spokesman for Mayor Gavin Newsom, did not return a message left at his cell phone requesting comment about the city's opposition to this costly, ineffective bill. He instead referred my call to the city's Department of Human Resources, where policy director Jennifer Johnston said, "the city hasn't taken a position yet."

Meanwhile, labor-backed San Francisco legislators Fiona Ma, Mark Leno, Leland Yee, and Tom Ammiano all voted in favor of the measure.

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