Doctors renew their push for vote on mandatory medical insurance.

The California Medical Association made an about-face last month and again stoked a nearly doused business controversy by putting mandatory health care coverage back on the front burner.

After announcing last October that it had dropped its efforts to place on the November ballot a mandatory health care coverage measure, the group announced last month its decision to go for the initiative after all. The measure, if approved, would force all employers with 25 or more workers to provide health insurance by 1994.

When the group announced it wouldn't pursue the initiative, opposition groups -- including such labor-intensive industries as hotel, grocers and restaurants, plus the insurance industry -- abandoned fundraising and campaign efforts. But now business groups are gearing up again to fight the effort.

Under the proposed plan, called Affordable Basic Care, employers would pay 75 percent of the cost of a health plan and employees would pay 25 percent. The CMA recently amended the initiative to say that employees would not have to pay 25 percent if that amount constitutes more than 2 percent of their wages. They would shell out 2 percent and the employer would make up the difference.

The plan is to provide insurance at a cost of $100 a month for individuals and $250 a month for families. Employers with more than 25 employees would be required to provide insurance by 1994, but all employers would be required to provide it by 1997.

Dr. Richard Corlin, a Santa Monica physician who is the current president of the CMA, said he wanted to tell the business community: "We are not looking to beat them in a fight. These are difficult times for all of us. We are going to have health access reform. This is the best and cheapest way to do it."

Corlin announced plans to re-activate the initiative at a press conference in Sacramento where he was joined by Senate Republican Leader Ken Maddy of Fresno and Democratic Assembly Speaker Willie Brown of San Francisco. Both lawmakers said they would introduce the doctors' plan in the legislature and try to pass it as a law.

Corlin noted that if the legislature enacted the measure, the ballot initiative would be scrapped. Corlin had previously told the Business Journal that the doctors only began considering an initiative after the legislature failed to pass a comprehensive health reform bill for the last two years.

Business groups have speculated that one reason the CMA reactivated the initiative is because it was able to hire Steve Thompson, a top aide of Speaker Brown, to head the effort. But Corlin insisted the plan to go ahead with the initiative had nothing to do with Thompson's employment.

Corlin said his group dropped earlier plans for the initiative after a lobbying effort allegedly staged by insurer Aetna Life & Casualty Co. He received 150 letters from businesses, saying they would negotiate a health plan with the doctors group, but the letters were only "a front for Aetna," Corlin charged.

None of the businesses that had written to him would meet with him except for Aetna, Corlin said. At a meeting in Sacramento, the Aetna representatives refused to discuss any plan that had insurance reform in it. "It was the most insulting meeting I have ever been to," Corlin said.

Kathleen Murphy, counsel for government affairs for the Hartford, Conn.-based insurer, said that it was true that Aetna representatives met with Corlin, but it was after the CMA had already decided to pull the initiative. "I don't know why Dr. Corlin is singling us out. ... I don't agree with his remarks," Murphy said.

Murphy's firm and other business groups have complained that the doctors' plan provides for little cost containment for procedures performed by physicians.

Under the doctors' initiative, insurers would be forced to issue insurance and renew policies, and they would not be allowed to refuse to write policies because of pre-existing medical conditions. The state would be divided into six geographic areas and insurers would have a 30 percent range of rates they could charge for health insurance within the area.

Richard Claussen, campaign consultant for the Consumer Health Insurance Coalition, a political action committee created last year by the insurance industry to fight the initiative, said that he is in the process of re-activating the committee and contacting insurers to tell them the doctors have decided to file the initiative.

Claussen said that although the initiative could bring insurers more business, "I've heard no one in the industry say that they can live with the measure that's been filed."

Jo-Linda Thompson, lobbyist for the California Restaurant Association, said waiting until the last minute to file was a smart, strategic move by the doctors, who reportedly have a war chest of $6 million to $8 million to finance the qualification drive. The restaurant association has less than $100,000 to fight the measure, she said.

"They have a lot of money to pay for this initiative," she said. "They stopped our fundraising effort by four months."

Thompson said mandatory health insurance for employees is more important than smoking bans or any other issue the restaurant industry faces.

Jim Abrams, executive vice president of the California Hotel and Motel Association of California, which represents 170,000 motel rooms across the state, said passage of the measure would cause more properties to go into foreclosure or make owners pack up and move out of state. A "significant" number of association members, especially owners of small properties, do not provide health insurance for employees, he said.

"This is the last thing we need right now. The industry is on its back," he said. Abrams noted that hotels and motels lost an average of $2,000 a room nationwide last year.

He also objected to a part of the plan that would force employers to pay the extra cost of health insurance if the employee's cost of health insurance is more than 2 percent of their wages. Abrams noted that in his agency, much of the employees' compensation is in tips and "we don't get to count the tips."