Last year, the budget writers in Gov. Jerry Brown’s administration held their noses when Democrats pushed through the Legislature a $3.2-million subsidy for a union healthcare plan.
It was something the state would “hopefully get out of the business of doing next year,” Keely Bosler, the chief finance deputy, said at the time.
But the governor approved an additional $2.5-million subsidy in June, and now Democratic lawmakers want a longer financial commitment. They passed legislation last month that would provide similar funding for the union — the storied United Farm Workers once led by Cesar Chavez — for five more years.
The measure, which would cost taxpayers as much as $3 million annually, is on Brown’s desk, awaiting his signature or veto. A Republican analysis of the proposal called it “an unprecedented sweetheart deal.”
Union officials have said they need the money because their bare-bones insurance plan limits annual benefits to $70,000 annually, falling short of rules created by President Obama’s healthcare overhaul.
Without the state money, they said, the plan would need to shut down, and farmworkers would have to enroll in Medi-Cal, forcing taxpayers to incur even greater costs.
“We could say, ‘You’re on your own,’ ” and let the union insurance collapse, said Sen. Richard Pan (D-Sacramento), the bill’s author. “Think about the consequences of that.”
The healthcare plan, which covers 16,000 people, was the first of its kind in the country when it was created in 1969. It is paid for by employer and employee contributions and named for Chavez ally Robert F. Kennedy.
Although the size of the United Farm Workers has declined over the years, the venerable union is still politically influential. Dolores Huerta, who helped Chavez create the union, remains a sought-after spokeswoman for Democratic and Latino causes.
Brown’s relationship with the farmworkers has been more ambiguous — in his first term as governor, in the 1970s, he allied himself with Chavez. But in recent years he has vetoed some legislation sought by the union to improve its leverage.
The latest proposal to subsidize the farmworkers’ healthcare plan arrived in August, when Pan gutted another proposal and replaced it with the bid to extend the funding.
Lawmakers passed the measure, SB 145, in September despite a legislative analysis that said it could set the wrong precedent.
“Other purchasers of health care for farmworkers and other industries that employ low-wage workers may also wish to have this type of assistance from the state,” wrote a consultant for the Senate health committee. “This proposal raises several policy questions, including whether it is appropriate for the state to assume the role of reinsurer for high cost claims.”
Pan said the union is in a “unique situation.” Because farmworkers often move from place to place, he said, it would be difficult for them to enroll in public healthcare; California’s Medi-Cal program is administered by individual counties.
He’s not worried about setting a precedent for state intervention.
“If there’s some other group that says they have that situation as well, let’s have that conversation,” he said. “I’m not aware of anyone.”
Richie Ross, a consultant for the United Farm Workers, has previously argued that the state funding is a better deal for taxpayers.
In the last year, the healthcare plan had 17 cases with claims exceeding $70,000, for a total cost of $1.4 million, according to information the union provided to lawmakers. If the plan became defunct, enrolling farmworkers and their families in Medi-Cal would cost more than $6 million a year.
“It’s a straight-up financial decision the state should make,” Ross said in May. Neither he nor a union spokeswoman responded to requests for comment Friday.
Brown’s Department of Finance, which opposes the legislation, questions the union’s estimates. In an analysis, finance officials said they were “unable to verify” how many farmworkers would qualify for Medi-Cal, which provides coverage to low-income residents.
In addition, administration officials questioned the wisdom of using taxpayer money to subsidize the union’s healthcare plan.
“This proposal creates a new, ongoing program over which the state has no oversight,” said the Department of Finance analysis.