California Assemblyman Paul Horcher, R-Whittier, vice chairman of the Assembly Insurance Committee, said that legislation calling for the pooling of small business employers into larger groups for rating purposes was the first step for providing coverage for all Californians.

At a news conference here Wednesday, Leonard D. Schaeffer, chairman and chief executive officer of Blue Cross of California, Charles Stewart, president and chief executive officer of Blue Shield of California, and Thomas C. Sutton, chairman and chief executive officer of Pacific Mutual Life Insurance Co. pledged to work together for passage of Mr. Horcher's Assembly Bill 3657.Together these companies provide health care benefits to more than half of the state's insured population.

"Most of California's uninsured work for employers with fewer than 25 employees," said Mr. Horcher. "This legislation guarantees the issuance and renewal to any group seeking health coverage," he added.

''I am offering this legislation to help ensure that all carriers treat small groups fairly," Mr. Horcher told reporters gathered at the state capitol.

"Most of California's uninsured work for employers with fewer than 25 employees. This bill is a significant first step toward solving access problems for these uninsured workers and their dependents," he said.

His comments come at a time when insurers, doctors, hospitals, consumer organizations, small business owners, and unions are battling over how to provide health care for 6 million uninsured Californians.

Leaders of the three California- based health insurers offered support for Mr. Horcher's bill, instead of the "24-hour" health care package suggested by state Insurance Commissioner John Garamendi.

Mr. Garamendi's 24-hour plan would provide a single-payer health insurance system covering workers compensation and non-work related illness or injury.

Mr. Schaeffer, of California Blue Cross, said the legislation would pre vent "redlining" or "blacklisting" by insurance companies, and prevent market discrimination by pooling small business risks.

"The reforms outlined in Mr. Horcher's bill would increase access to insurance for those who are currently not covered, stabilize the health insurance marketplace, establish fair practices for the insured population, and create incentives for insurers to offer affordable plans to those who currently have insurance," said Mr. Schaeffer.

Blue Shield's Mr. Stewart lauded the pooling idea for making an affordable market for small businesses. "These reforms will require carriers to create pools of small em ployers and limit the rate variability within those pools, thus providing a more equitable approach to risk- sharing throughout the industry." Mr. Stewart said.

The ultimate benefit for the consumer will be a much broader choice of carriers and plan designs.

Mr. Sutton, of Pacific Mutual, said a reformed private sector is the best vehicle to create equitable health insurance pools for small groups.

"We believe, as does Assemblyman Horcher, that meaningful, socially responsible carrier reform should be allowed to demonstrate its effectiveness before consideration is given to more radical alternatives," he said.

Bill Packer, communications director for the Association of California Insurance Companies, Sacramento, warned that Mr. Garamendi's 24-hour plan could raise false hopes as it does not address the underlying costs of the system.

Mr. Garamendi's proposed earthquake program, workers compensation program and auto insurance programs have all failed to meet the expectations of consumers, he said. "If you do not charge enough money to cover the cost of a risk you have financial problems," Mr. Packer concluded.