High court won't review San Fran health care plan

The U.S. Supreme Court has rejected a business-led challenge to a universal health care program in San Francisco that has enrolled more than 53,000 people who lacked health insurance.

The justices on Monday denied an appeal from the Golden Gate Restaurant Association of an appeals court ruling upholding the program's requirement that employers help pay the bill or give their workers health coverage.

The decision allows the program to maintain its emphasis on sharing the financial responsibility for health care - a cost borne by the public, employers and employees, said Tangerine Brigham, director of Healthy San Francisco.

"If they don't contribute funds for health care services and their employee comes to a public or community-based organization for care, the cost is borne by the public," Brigham said.

Kevin Westlye, executive director of the restaurant association, said his group has no disagreement with Healthy San Francisco, but questioned whether employers should have to pay for what they consider an overpriced mandate.

The mandate is already costing jobs and making dinning out in San Francisco more expensive, Westlye said.

The restaurant association said the city cannot require employers to pay the fee because a federal law generally prohibits state and local interference in the area of benefits that are offered to employees.

Healthy San Francisco was created in 2006 to provide health care for residents who lack private insurance but are not eligible for other public programs. The city says the program has resulted in a drop of almost 70 percent in emergency room visits at San Francisco General Hospital.

Officials insist the program will remain important even with the passage of a national health care law.

Businesses with at least 20 workers that do not provide health care must give part of each employee's wages to the city as a fee to help pay for the $200 million program. About $14 million of the program's budget last year came from roughly 1,100 employers, Brigham said.

Business groups sued to halt the program and a federal judge agreed that it placed an undue financial burden on them. But the 9th U.S. Circuit Court of Appeals in San Francisco overturned the ruling, saying the fee does not violate the federal Employee Retirement Income Security Act.

The groups say the fee has caused layoffs and reduced hours, even as many restaurants have added a health care surcharge to customers' bills.

National business groups joined in support of the challenge, warning that other cities and states would be tempted to transfer the cost of health care for the uninsured to businesses, especially given current economic constraints on government budgets.

The Obama administration recommended that the court turn down the case, in part because the recently enacted national health overhaul makes it less likely that other places would create programs similar to San Francisco's.

But city officials say the health reform law will not stop their program. In March, Mayor Gavin Newsom said it is still necessary because the national plan would exclude thousands of local residents, including illegal immigrants who are eligible for coverage under the San Francisco plan.

About 94 percent of the program's patients said they were satisfied with services, according to a survey by the Henry J. Kaiser Family Foundation.

The case is Golden Gate Restaurant Association v. San Francisco, 08-1515.

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Associated Press writer Mark Sherman in Washington contributed to this report.