Consumer Watchdog – Núñez sweetens deal for unions

Los Angeles Times

SACRAMENTO, CA -- As Assembly Speaker Fabian Núñez sought the endorsement of two major labor unions for his plan to overhaul healthcare in the state, he added several provisions to the legislation sweetening the deal for union members, including millions of dollars for better benefits and worker training.

The changes came soon after the unions donated more than $1 million combined to an initiative sponsored by Núñez that would extend numerous lawmakers' terms, including his own.

In the final version, unveiled only days before Monday's vote, the unions received three years of increases in state funding of health insurance for tens of thousands of workers who provide in-home care for the elderly, blind and disabled.

The legislation as approved gives unions unilateral authority to create and operate trust funds to provide employee healthcare, taking the power to negotiate away from the county agencies that employ the workers. The amendment was sought by the Service Employees International Union.

"We weren't aware of it until Monday afternoon," said Paul McIntosh, the executive director of the California State Assn. of Counties.

"It appears that we don't have an opportunity to express our concerns," McIntosh said. "One of the questions we have, that we're still analyzing, is whether this would drive up the cost of that insurance." He said the benefit increase for home care workers -- which would reach 75 cents an hour in the third year -- could be significant because the workers are on duty tens of millions of hours a year.

Another perk the unions negotiated allocates $25 million a year for a "Workforce Development Program Fund" that would provide retraining for their members employed at county hospitals and clinics.

Núñez's spokesman, Steve Maviglio, said the speaker made multiple changes to the bill in the final days for many groups.

"We worked with hundreds of stakeholders, including organized labor," Maviglio said. "There was a flurry of activity," he said. "That's part of compromise -- give and take -- and that's exactly what happened. Nobody walked away from the table 100% happy."

Gov. Arnold Schwarzenegger, the other main architect of the $14-billion deal to extend healthcare to most Californians starting in 2010, went along with the changes that Núñez (D-Los Angeles) made on the unions' behalf.

Aaron McLear, Schwarzenegger's spokesman, said "the governor and the speaker gave some ground in this negotiation, and the governor is pleased with the final product."

The plan, whose fate in the state Senate is still murky, also requires that voters approve a companion initiative to finance it. The governor and speaker plan to place that measure on the November ballot.

The support of SEIU and the American Federation of State, County and Municipal Employees will be essential to the plan's backers in that fight. And the unions were crucial for Núñez to sway all the Democratic lawmakers in the Assembly to vote for Núñez's plan. With a number of unions and other groups opposed, lawmakers would have feared political repercussions without some of their traditional campaign supporters backing them.

At the same time they were pushing for changes to the bill, the unions were also providing big donations to Núñez's initiative campaign to change the state's term limits law. The American Federation has given $610,633, most of it last month, and SEIU has given $1.1 million, half of it last week.

Andy Stern, the head of SEIU, marked the bill's passage Monday in the Assembly by flying in from Washington for a news conference with Núñez and Schwarzenegger.

"We were waiting for the payoff to show up," said Jerry Flanagan, healthcare policy director for the Foundation for Taxpayer and Consumer Rights, a Santa Monica-based nonprofit that believes the Núñez plan will be too expensive for some consumers. "It's really remarkable, in terms of the express aiming of this money toward two particular unions."

But Jeanine Meyer Rodriguez, a spokeswoman for the SEIU California State Council, said her union's support for the bill was not based on horse-trading.

"We have been working on healthcare reform really, really hard all year long," she said. "And there is this perception that suddenly all these amendments happen and then we're on board, which is just wrong."

Willie L. Pelote Sr., the assistant director for political action for the federation in Sacramento, said that others negotiated the recent changes and that he was not aware of them.

The new language boosting health benefits for in-home care workers would add an immediate 25 cents an hour to the state's current 60-cent hourly reimbursement rate. That increase would rise to 50 cents an hour in the second year and 75 cents in the third year if state revenues increased by a 5% benchmark.

Beth Capell, a lobbyist for SEIU, said the union made no apologies for pushing to increase benefits for the workers, who, she added, often make little more than minimum wage. "SEIU is committed to getting low-wage workers we represent health benefits," she said.

The union represents county hospital workers in every California county where there is one except San Mateo and Contra Costa counties, which are represented by the American Federation, Capell said. She also said trust funds have been used by unions to provide health insurance for years. But McIntosh of the California counties association said that in some areas "there's been some contention specifically with SEIU over a trust-funded health plan versus alternatives" that counties would prefer to provide on their own. He said his group would take up the issue in the Senate.

"It appears that the amendment restricts the counties' negotiating ability when it comes to healthcare," McIntosh said.

As for the workforce development program, Capell said it was based on a pilot project in Los Angeles County, where hospital workers have to be trained in new jobs as public hospitals take on an increased role in providing care for the uninsured. She said most federal money goes to train new workers, hence the need for more money for existing hospital employees.

"When you reorganize big institutions like county hospitals, people have to be moved around and they need to be retrained," Capell said.
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Contact the authors at: michael.rothfeld@latimes.com or jordan.rau@latimes.com