Proposals
in Sacramento, 2007
Go to Senator Sheila's Kuehl's
page on our website to see her essays on proposals for this year.
Download a table comparing various
proposals: table032407.doc
2/5/2008. Leeland Y. Yee. ABX1 1
favored insurers over health for all Californians. San Francisco Chronicle.
11/14/2007. Zenel Cortez. Hasty
health care deal not ready for prime time. San Francisco Chronicle.
Oct-November. Sarah Rogers. The Ghost of Earl
Warren. Senator
Kuehl's newsletter.
9/1/2007. Jordan Rau. Governor
and Nuñez
Gamble on Strategy for Medical Coverage. Los Angeles Times.
8/28/2007. Fabian Nunez. Healthcare
Reform—Now. Los Angeles Times.
6/28/07. Daniel Weintraub. Californians
support Major Change in Health Care. Sacramento Bee.
6/22/2007. Jordan Rau. Sacramento
Democrats Merge Health Plans. Los Angeles Times.
6/8/2007. Tom Chorneau. 2 Bills
Open Critical Debate on Health Care. San Francisco Chronicle.
6/8/2007. David Lazarus. Let
Voters Reform Health Care. San Francisco Chronicle.
4/11/2007. Jordan Rau. Proposal:
Get Health Insurance or Pay Fine. Los Angeles Times
3/1/2007. Daniel Weintraub. One
Health Care Plan—Kuehl's—Is Really Different. Sacramento Bee.
2/6/2007. Jordan Rau. Coalition
to Support a California Healthcare Plan. Los Angeles Times.
2/1/2007. Geoge Skelton. GOP
Leaders Offer Governor a Prescription for Expanding Health Coverage. Los Angeles Times.
2/1/2007. Daniel Weintraub. Republican Health
Plan Offers Some Good Ideas. Sacramento Bee.
1/29/2007. Ricardo Alonso-Zaldivar. California
Health Plan Has Budget Hawks Antsy. Los Angeles Times.
1/26/2007. Rick Wartzman. Governor's
Health Plan Could be Short-lived. Los Angeles Times.
1/22/2007. Lynda Gledhill. California:
Taxes—or Fees—in New Health Plan Raise Critics' Ire. San Francisco Chronicle.
1/22/2007. Lisa Girion. Insurers Have Own Ideas
on Coverage.
Los Angles Times.
1/19/2007. Deborah Burger. Health
Care: The Governor's Plan: a Clear Choice on Health Care Reform. San Diego Union Tribune
1/18/2006. Daniel Weintraub. How
the big three health care proposals compare. Sacramento
Bee.
1/17/2007. E. Richard Brown. Schwarzenegger's
Plan Needs Fixing to Make Sure the Middle Class Has Coverage
Too. Los Angeles Times.
1/12/2006. Paul Krugman. Golden State Gamble. New York Times.
1/9/2007. Anthony Wright. Governor Proposes
Major Changes in Healthcare. Health Access.
1/9/2007. A Flawed
Cure. Los Angeles
Times Editorial.
1/9/2007. A Starting Point on Health Care. San Francisco Chronicle
Editorial.
1/9/2007. Jordan Rau. Gov. offers
bold prescription: All Californians would be required to carry
medical insurance.
Los Angeles Times
1/9/2007. Lisa Girion. Plan to ensure health
coverage could raise costs. Los Angeles Times.
1/8/2007. Press release from Gov. Schwarzenegger's
Office.
Leland Y. Yee
ABX1 1 favored insurers
over health for all Californians
San Francisco Chronicle
November 14, 2007
I joined California nurses, school employees, senior
groups and a number of labor unions last week in opposing the governor's
flawed health-care bill, Assembly Bill X1 1. While the bill was
touted as a fix to our broken health-care system, after extensive
study by the Senate Health Committee and the nonpartisan Legislative
Analyst's Office, it is now clear that this proposal was bad for
consumers and unfairly favored insurance companies.
This bill was not a step in the right direction, but a huge jump backward for
working families who lack health care. As a co-author of the true universal health
care bill, Senate Bill 840, I opposed AB X1 1 because it would have required
consumers to buy their policies regardless of the cost. Under AB X1 1, all Californians
would have been required to buy insurance with no caps on premiums, no regulation
of the costs of insurance or medical expenses, no maximum deductibles, and no
clearly defined minimum coverage.
In addition, the bill would have provided incentives for employers who now provide
benefits to cancel coverage in order to pay cheaper premiums or shift more costs
to workers.
Much of the funding was also tied to an increase in the tobacco tax, which I
support. However, due to the success of our anti-smoking programs, the funding
would be undermined and the revenue stream would continue to decline while the
cost of insurance would undoubtedly rise, with shortfalls falling on the backs
of working families. The bill also naively counted on increased funding from
the federal government - at a time when the Bush administration is cutting children's
health-care coverage. California sends significantly more revenue to Washington
than we get back in federal funding and services.
The most objectionable part of this proposal was that if an individual did not
purchase insurance within 62 days of the enactment of this flawed legislation,
then the Franchise Tax Board would have been authorized to collect premiums by
garnishment of wages or mortgage liens on the property of working Californians.
This is simply unethical and an unacceptable way to treat California workers.
That is why the California Nurses Association, California School Employees Association,
Congress of California Seniors, California Alliance for Retired Americans, Gray
Panthers, Senior Action Network, United Food and Commercial Workers, Communication
Workers of America, League of Women Voters, and the Teamsters, among many stakeholders,
opposed the bill.
Last week, the nonpartisan legislative analyst also concluded that the program
presents billions of dollars in risk to California taxpayers while the state
is struggling to close a $14.9 billion budget deficit.
An analysis by Professor Jonathan Gruber of the Massachusetts Institute of Technology
and the National Bureau of Economic Research shows that due to the struggling
economy, the governor's health-care plan could result in an even more significant
hit to the state budget and increase the number of uninsured.
According to the Gruber study, "[F]or every 100 people losing their jobs,
the number of people uninsured grows by 85." Under AB X1 1, this scenario
would force even more Californians to spend thousands of dollars a year for insurance
they cannot afford.
Such an experiment is under way in the Commonwealth of Massachusetts with troubling
results. Already the Commonwealth's budget is being strained by the unanticipated
costs of the mandated insurance program. Over the next few years, Massachusetts
lawmakers will be forced to divert hundreds of millions of dollars out of the
general fund to subsidize a program that was supposed to pay for itself, taking
scarce funds away from other critical programs. While this is happening, Massachusetts
residents who have not or cannot comply with the mandate to buy costly insurance
on the open market are being forced to pay hefty fines, further compromising
their ability to meet the requirements of the law.
Under AB X1 1, the consumer would have been forced to foot the bill so insurance
companies could profit. Instead of pushing such a fatally flawed legislation,
we should all be fighting to change our failing health-care system without penalizing
those who can least afford it. This issue is too important for us to get it wrong.
Leland Y. Yee is the assistant president pro tem of the state Senate. Sen.
Yee represents the Eighth Senate District, which includes San Francisco and San
Mateo counties.
Sara Rogers, Consultant, Health
The Ghost of Earl Warren
I'm writing this article on Halloween night,
still in my office in the State Capitol. I‚ve just finished watching the
Assembly Health Committee hold a 6 hour hearing on the Governor‚s
health care proposal, during which I ate too much Halloween candy,
and, consequently, I find myself in a silly mood.
I am imagining the ghost of the last Republican Governor devoted to passing health
reform, Governor Earl Warren, floating through the capitol, his soul unable to
rest until health reform is complete.
Well, actually it"s no more dramatic than proclaiming that health
reform is "now or never". With the "Year of Health
Reform" drawing to a close, one thing is clear: this issue is not
going away any time soon.
We are fast approaching the 60th anniversary of former California
Governor Earl Warren‚s attempt to achieve single payer health care for California. If
only the ghost of Governor Earl Warren would appear to Governor Schwarzenegger.
Even at the same time as the Governor‚s administration considers
enacting emergency regulations to create wait lists and disenroll
children in Healthy Families due to the President"s veto of SCHIP,
his health reform proposal asks us to blindly trust that affordability,
accessibility and cost containment are taken care of.
But there‚s a big problem. A thorough reading of the Governor"s
proposal clearly shows they aren‚t.
The truth is that the release of the Governor‚s new draft language in his
special session was deeply disappointing. The language actually reflected
a significant step backward even from the preliminary outline released at the
beginning of the year. While imposing a blanket individual mandate
requiring every California resident to demonstrate proof of health insurance,
it offers with no affordability protections. This means that unless you have
a very low income and are, therefore, eligible for public subsidies, you would
be required by law to buy private health insurance regardless of how much of
your income it would consume. With health care premiums growing
2-3 times faster than wages, the consequences of this policy for
working families are unthinkable.
Furthermore, the Governor's notion of making insurance affordable
is to remove all minimum benefit requirements, potentially requiring
low income Californians to purchase unaffordable, high-deductible
insurance that doesn't even cover what they need.
Discussion in the Assembly Health Committee of the Governor's proposal
to privatize the California lottery to fund health care left a fury of unanswered
questions including the potential impact on other public services that rely on
the lottery, including education.
Overall, today's lengthy hearing highlighted continuing deep concern
amongst nearly all the stakeholders, with virtually no support. Contrast this with
the nearly 500 organizations fighting hard to secure the very proposal for which
Republican Governor Earl Warren advocated nearly 60 years ago ˆ single
payer universal health care.
Single payer supporters strongly agree that we are at an historic
crossroads for health reform. That is why it is particularly
important to spend our energy at the crossroads on a proposal that
truly achieves what Californians deserve - a modern, affordable
health care system that covers everyone.
SB 840 has been steadily moving through the legislature, spurring
debate, and winning converts. As the only proposal that has
been tested and proven to contain costs, provide comprehensive
benefits and cover every resident, affordably, it is critical that
we continue to push hard for the gold standard for health reform.
The legislation will continue to move in the legislature, beginning
again in January. In the meantime there is a great deal of work happening across
the grassroots. Organizers continue to approach City Councils, Boards of
Supervisors, and School Districts for support. They are sponsoring local town
halls and seeking organizational endorsements from local businesses and other
organizations in order to build local support and educate communities about the
need for single payer health care. This work will pave the way next January
to bring single payer back to the Governor‚s desk.
Let‚s mark the 60th anniversary of Earl Warre'‚s heroic
attempt at achieving single payer insurance for California by giving
Governor Schwarzenegger a chance to make history with real health
reform.
Back to top
Zenei Cortez
Hasty health care deal not ready for prime time
San Francisco Chronicle
November 14, 2007
Rewarding insurance companies is not health care reform
While those who welcome a California health care deal at any cost will cheer
the approaching consensus between Democratic leaders and Gov. Arnold Schwarzenegger,
there is reason to be wary of a hastily drawn plan that could exacerbate the
health insecurity for many Californians.
No matter how you dress it up, the package still amounts to a huge gift for the
insurance industry, with millions of new customers who may get little in return.
Insurers will still decide who gets care, limit coverage but charge what they
want.
Combining the latest version of legislation from Assembly Speaker
Fabian Núñez
and the most recent proposal by Gov. Arnold Schwarzenegger, the
final agreement will likely include a mandate on most uninsured
Californians to buy insurance, a requirement that employers provide
health benefits or pay a penalty, and a financing plan headed
to next November's ballot.
It's equally evident what the deal won't include:
-- Limits - other than a vague reliance on the market which created the mess
- on skyrocketing insurance premiums, deductibles, co-pays, hospital charges,
doctor's bills and other fees that are rising at double, triple or more the rate
of inflation and increases in worker's wages.
-- Choice of doctor, hospital or other provider. Unlike Medicare, insurers or
employers will continue to be able to restrict patients to their medical plan's
network or require costly additional payments to see other providers.
-- An end to insurance industry control over basic decisions
about your health. Insurers will still be able to block referrals
to specialists, deny needed medical tests or access to the newest
prescription drugs, and can still refuse to pay for care deemed "experimental" or "not medically necessary," even
when it is recommended by your doctor.
The goal of expansive reform is laudable. However, the fine print shows this
pending plan is full of holes.
All Californians not covered at work or eligible for public subsidies
will be forced to buy insurance - or, Speaker Núñez
said in a press conference last week, have the premiums deducted
from your wages. Punishing the uninsured by seizing their pay
to pad insurance company profits is not health care reform.
The cost protections are a mirage. Many middle-income families will qualify for
state tax credits to help pay for the insurance they are required to buy. But
a tax credit hardly makes up for costly monthly premium payments and other fees.
Further, the proposed annual out-of-pocket limit of 6.5 percent in costs applies
only to the barebones mandatory policy. Anyone seeking coverage that includes
such essentials as dental, vision, mental health, long-term care, and other needed
care will have to pay much more.
The likely result will be more consumer debt for medical bills; a great boon
for the banks and credit-card companies but increased financial risk for Californians
and an encouragement to self-ration needed care due to the prohibitive cost.
Another significant problem is the tax on employers who must provide coverage
or pay a penalty of up to 6.5 percent of their payroll.
According to a June report by the California Healthcare Foundation,
non-union California employers spend on average 10.4 percent
of their payroll on health benefits. Unionized employers pay
14.5 percent of their payroll or $5,000 more per employee than
they would pay under the Núñez version of reform.
The Schwarzenegger proposal sets this cost at even less.
Especially with no controls on rising premiums, the final compromise plan will
present an obvious incentive for businesses to erode existing coverage by switching
to high deductible plans that shift more of the cost to employees. Or they may
just drop coverage entirely, escalating labor conflicts in California as more
working people struggle to maintain decent health coverage for their families.
Finally, the funding is highly uncertain. It relies on federal
money that has been vetoed twice by President Bush. The Núñez
bill also counts on increasing tobacco taxes, an idea rejected
by California voters just last year. The funding plan also moves
money away from our already endangered public safety net hospitals.
A decade ago, there was also a consensus for energy deregulation. The result
was blackouts, higher costs for consumers, a financial calamity for the state,
and open thievery by Enron and other energy corporations.
We should learn from that experience. Rather than rush through an ill-conceived
plan that primarily rewards the same insurance giants, let's adopt a more commonsense
step, expand children's health coverage with federal funds now and get real,
guaranteed health care reform done next year.
Zenei Cortez is a registered nurse and a member of the California Nurses
Association's Council of Presidents.
Back to top
Jordan Rau
Governor and Nuñez Gamble on Strategy for Medical
Coverage
Los Angeles Times
September 1, 2007
With time running out to overhaul California's
healthcare system this year, Gov. Arnold Schwarzenegger and Assembly
Speaker Fabian Nuñez are fashioning a high-stakes strategy
to raise business and hospital taxes through a ballot measure that
would circumvent defiant Republican lawmakers.
"I think we're on the verge of doing something
huge," Nuñez told The Times' editorial board Friday.
The unusual partnership between the Republican
governor and the Los Angeles Democrat echoes their collaboration
last year, which resulted in landmark global warming legislation
and a minimum-wage increase.
But a closed-door deal could incur political wrath
for both men. The governor is backing tax increases despite last
year's campaign pledge against them, and Nuñez could alienate
labor and consumer advocates for supporting mandatory health insurance.
Coming with just two weeks left in the legislative
session, the negotiations are focused on expanding medical coverage
to nearly all of the 4.9 million Californians without it.
The plan would require all Californians to have
insurance and would give subsidies to those unable to afford coverage.
It would also address the problems of the private insurance market
and require healthcare providers to reveal the costs of their services
to foster competition.
Schwarzenegger and Democrats have agreed all year
on most of those goals. But they have been stymied on how to pay
for it, since any tax increase passed by the Legislature requires
two-thirds support, necessitating some Republican votes.
GOP legislators have refused to budge on Schwarzenegger's
proposal for a blend of taxes on hospitals, doctors and employers.
And Schwarzenegger opposes as too high the Democratic alternative
of requiring all employers to spend the equivalent of 7.5% of their
payroll on medical care for their workers or pay a fee to the state.
Republicans oppose any tax increases and have favored piecemeal
efforts to make healthcare more accessible.
Under the gambit now being developed, the Democratic
majority in the Legislature would approve a bill containing most
of the plan except the financing, and possibly establish a special
board to work out the details. Those issues require only a majority
approval.
The governor, Democrats and supporters would draw
up a ballot initiative for next year. It would ask voters to approve
the employer spending mandate -- but at a rate lower than the Democrats'
proposal -- as well as a tax on hospital revenues, and possibly
a sales tax increase.
"The governor has always said he's open to
doing whatever it takes, and that includes the ballot," said
Daniel Zingale, a senior advisor to Schwarzenegger.
The money would be used to increase Medi-Cal payments
for healthcare providers that treat the poor and pay for insurance
for employees whose companies do not provide it.
The hospital tax would allow California to obtain
$1.7 billion in extra Medicaid money from the federal government,
which matches money the state provides for care of the poor. That
money would be distributed back to those hospitals based on how
many poor people they cared for.
The hospitals' support is critical to passing any
initiative. Plus, some strategists believe that strong backing
could budge enough Republican legislators to make the initiative
unnecessary because many hospitals in GOP legislative districts
stand to benefit financially.
In recent days, Schwarzenegger has intensified
his effort to win their backing. An analysis commissioned by some
of the hospitals and released a week ago found that the industry
would benefit from the additional Medicaid money, and only a small
number would be net losers. Of the major chains, Catholic Healthcare
West and Sutter Health would each gain more than $180 million,
Tenet Healthcare would gain $110 million and Adventist Health would
gain $82 million, according to the administration's review of the
hospital data.
Kaiser Permanente would lose $119 million, but
its chief executive has been supportive of Schwarzenegger's effort.
About 30 individual hospitals that don't treat many poor people
or are specialty institutions would also lose money.
C. Duane Dauner, president of the California Hospital
Assn., has staunchly resisted the hospital tax as long as any hospital
loses money. But Thursday, the executive committee of the association's
board met with Schwarzenegger to hear his pitch, and the full board
meets Tuesday to discuss its next action.
"As hospital groups have become aware that
this actually does work, the momentum has swung from resisting
it outright to feeling that it holds a lot of promise," said
Wade Rose, a spokesman for Catholic Healthcare West, which has
been pushing for the tax.
The plan Schwarzenegger and Nuñez are discussing
would deviate in two significant ways from the governor's original
proposal that he laid out in January to national attention.
First, while all Californians would be required
to have insurance -- a bottom-line requirement for Schwarzenegger,
but one opposed by labor unions and consumer advocates who say
low-income wage earners could not afford it -- Nuñez is
insisting on protections for people who make too much to qualify
for state subsidies but not enough to shoulder the costs of premiums.
First, while all Californians would be required to have insurance
-- a bottom-line requirement for Schwarzenegger, but one opposed
by labor unions and consumer advocates who say low-income wage
earners could not afford it -- Nuñez is insisting on protections
for people who make too much to qualify for state subsidies but
not enough to shoulder the costs of premiums.
One idea Nuñez floated to The Times editors
would be to cap the maximum amount anyone would have to pay for
premiums at 5% of their income. However, that would mean the state
would need to find billions more in subsidies than Schwarzenegger
had proposed in his $12-billion plan.
The second major difference is that the plan excludes
Schwarzenegger's proposal to tax the income of doctors' practices.
The governor's plan would have used that money
to increase Medi-Cal payments to doctors, but the California Medical
Assn. has opposed the idea, which many doctors say could devastate
their practices.
"Some people say that so far doctors have
not contributed one single thing to this conversation," Nuñez
said. "I'm very disappointed about that. I've never seen a
doctor in a welfare line."
In response, Dr. Anmol Mahal, president of the
doctor's lobby, said in a statement: "Doctors take care of
uninsured patients each and every day. As well as any Sacramento
politician, we understand the critical importance of passing healthcare
reform for this state."
Nunez said he understood why Schwarzenegger could
not support the Democratic bill, AB 8, because its employer tax
was nearly double the 4% payroll spending requirement that Schwarzenegger
proposed in January.
"This is his last link to his claim on being
a Republican, having business support," Nuñez said. "He
loses that, he's done."
The strategy has far to go. Senate President Pro
Tem Don Perata (D-Oakland) has not signed on to the idea, nor have
rank-and-file Democrats. And there is little time left in the legislative
session. It is scheduled to end Sept. 14, but lawmakers are hoping
to finish Sept. 11, before the Jewish holidays.
At an event in San Diego on Friday, Schwarzenegger
said he was optimistic that a deal could be reached.
"Something that was maybe impossible to be
done last year, impossible to be done five years ago or 10 years
ago, I feel that the timing is right," he said.
Nuñez was more guarded.
"The progress we've made has been considerable," he
said. "The question now is, can we go back to our constituencies
and can we make the deal work."
"It's not gonna be easy for him and it's not
gonna be easy for me," Nuñez said. "He's got a
business issue, I've got a labor issue, and we're both gonna have
to figure it out. We're both gonna have to be Nixon in China."
Back to top
Fabian Nuñez
Healthcare Reform—Now. We can't let radicals stopy
my sensible plan for helping desperate Californians.
Los Angeles Times
August 28, 2007
(Fabian Nuñez is speaker of the Assembly.)
In the next 15 to 18 days before the Legislature
adjourns, the narrow window of opportunity we have to achieve healthcare
reform in California -- reform that expands access for those who
don't have health coverage and keeps costs down for those who do
-- will start to close. If history is a guide, we can expect an
anything-goes campaign in the next few weeks to delay, derail and
demonize healthcare reform. We need to focus on some basic truths
to keep that campaign from succeeding.
First, for nearly 10 months now, the reform proposals I put forward with Senate
President Pro Tem Don Perata have been vetted in the legislative process, fiscally
analyzed by academics and scrutinized by the media. Yet you can count on opponents
saying, "We're moving too fast; let's slow down." Practically speaking,
what they are really trying to do is kill any reform -- delay means death to
controversial big-issue legislation. Given more time, the forces against healthcare
reform will find ways to take more potshots at the proposals. We don't need a
special session of the Legislature later this year. We don't need to punt to
the 2008 election year.
There are two main proposals on the table. One is written by myself and Perata,
and one is from the governor. Let me explain why I think that the Nuñez-Perata
bill is the only one that can succeed so we can begin to deliver what Californians
need.
Basically, our legislation would call on employers to spend at least 7.5% of
their payroll on worker healthcare, with employees also contributing to the premiums.
The state would subsidize insurance for the poor. This plan builds on the current
employer-based system and only requires a majority in each house of the Legislature
for passage.
The governor's plan, on the other hand, would require everyone to have insurance,
and funding for it would come from a levy on doctors and hospitals in addition
to employer contributions. That levy would count as a new tax, according to the
legislative counsel, and new taxes require a two-thirds vote in the Legislature.
That in itself is a backdoor way of killing healthcare reform because it requires
more bipartisanship than can be delivered. The governor's inability to get Republican
senators to vote for his state budget -- and that's more a knock on them than
him -- shows the folly of trying to win support from the hyper-partisan right.
Does this mean that I don't want to include my Republican colleagues in the process
of creating reform? Not at all. But should the fate of healthcare reform be dependent
on far-right Republican senators who only support a laissez-faire/free-market
approach that Californians overwhelmingly reject? No way.
If you can't get the funding passed that would allow for every Californian to
purchase health insurance, then that simply can't be part of the law. We don't
have enough money in the state to cover everyone who doesn't work. And if we
can't ensure that everyone has access to coverage, we can't in good conscience
turn around and penalize someone for not having coverage.
Opponents of serious reform will trot out the alternative of merely expanding
state insurance programs to cover all children. That can't be the only aspect
of reform. The 700,000 children in California who don't have healthcare are going
to get it, but not at the expense of their parents and grandparents. We should
not pit one generation of Californians against another.
Those who want to see more complete coverage also will object to our plan because
they'd rather see a single-payer system -- in which a government-run entity contracts
with doctors and hospitals and handles all claims.
I embrace the idea; it is a noble goal and may one day prove to be the ultimate
answer. It's overwhelmingly supported by legislative Democrats and has growing
support from Californians. But in 2007, a single-payer plan would be vetoed by
the Republican governor just as he did the version the Legislature sent him in
2006. Sacrificing the good for the perfect doesn't make sense in the world of
public policy.
Last week, I spoke at a healthcare rally put on by AARP, marking the final push
for healthcare reform. In the 50 feet it took me to walk from the rally site
to the doors of the Capitol, I was stopped at least a dozen times by people desperate
to have someone listen to the problems they were having in the healthcare system:
a woman whose son had come out of a coma after two weeks -- and who could get
all the pain medicine he wanted, but no treatment to get to the root of his brain
disorder; veterans who could only get care at one of the state's far-flung veterans
homes; a woman whose self-employed daughter with leukemia couldn't get coverage.
We're not trying to turn this state into Cuba (with socialized medicine) or Canada
(with a single-payer system). We're just trying to do right by these Californians.
And doing right by them means doing reform right: a comprehensive healthcare
reform plan that makes sense and that we can afford, and doing it now.
Back to top
Californians Support Major Change in Health Care
Sacramento Bee
June 28, 2007
Although nearly nine out of 10 Californians who
have health insurance say they are satisfied with their coverage,
a large majority of voters would make major changes in the way
health care is delivered in the state, according to a new independent
poll to be released today.
Nearly three in four adults say they would support a proposal to require everyone
to have health insurance, while sharing the cost among employers, health care
providers and individuals.
Two out of three, meanwhile, would favor a system of national health insurance,
even if it would require higher taxes, the poll found.
The survey by the Public Policy Institute of California questioned 2,003 state
residents from June 12 through June 19. The results for the full sample have
a margin of error of plus or minus two percentage points.
About 81 percent of Californians have insurance, and of them, 49 percent report
that they are "very satisfied" with their coverage. Another 38 percent
say they are "somewhat satisfied" with their insurance. And only 36
percent say they are worried about losing their coverage. Yet many remain concerned
about the stability of the system, and about their ability to pay their health
care bills in the future.
With most people facing higher and higher health insurance premiums, and with
the daily news full of stories about insurance companies rejecting people seeking
coverage who have pre-existing health conditions, the issue has become a question
of security. Even people who are fairly comfortable with their own situation
fear they will not have health insurance or be able to afford health care when
they need it.
"For the average Californian, the issue of concern is the uncertainty about
the cost and the future of health care," said Mark Baldassare, president
of the Public Policy Institute and director of the poll. "That is what is
leading them to say they want reform."
Seventy-five percent of adults think the number of people without insurance is
a "big problem." And that concern crosses party lines. Eighty five
percent of Democrats, 78 percent of independents and 63 percent of Republicans
see the lack of universal health insurance as a big problem.
Seventy-one percent of California adults, moreover, are somewhat or very concerned
about being able to afford health care when a family member gets sick.
Given those numbers, it's not surprising that 72 percent also think the system
needs "major changes." Eighty-one percent of Democrats, 70 percent
of independents and 59 percent of Republicans feel that way.
About two-thirds, 66 percent, say they would favor a national health insurance
system, even if it meant paying higher taxes. Thirty percent said they would
oppose such a system. Democrats (78 percent) and independents (64 percent) were
strongly supportive. But only 35 percent of Republicans say they want the federal
government to take responsibility for their health care.
Support was more widespread for the outlines of a plan proposed by Gov. Arnold
Schwarzenegger, even without voters being told that the popular governor was
behind it. Schwarzenegger's plan would require all Californians to have insurance,
and it would require employers to provide coverage for their workers or else
pay a tax to the state. Doctors and hospitals would also be taxed to help expand
coverage for the poor.
Seventy-two percent of adults, including 81 percent of Democrats, 69 percent
of independents and 52 percent of Republicans, said they would support such a
plan.
"In concept, they support it because they don't see it as taking away from
what they have as much as adding some security and certainty for the future," Baldassare
said. "The concept of covering everyone is popular with Californians. The
idea of spreading the costs is also popular."
But so far, Schwarzenegger has not been able to translate that overwhelming public
support into any movement in the Legislature.
Democratic lawmakers have criticized his plan as too friendly to the insurance
industry, and they don't like the idea of requiring individuals to take responsibility
for obtaining coverage, even with hefty subsidies for the poor and the working
poor. They have proposed an alternative that would put more of the financial
responsibility on employers.
Republican legislators don't like the idea of taxing employers, doctors or hospitals,
or requiring anyone to buy health insurance or provide it for someone else. Instead,
they have offered a collection of ideas designed to give consumers more control
over their health care. And while Democrats say the governor's proposal does
not go far enough in regulating insurance company practices, Republicans say
they think it goes too far.
Although detailed negotiations are only now getting under way, the three-way
stalemate among Democratic and Republican lawmakers and the governor threatens
to block any action this year.
But today's poll results suggest that the issue is not going to go away. If legislators
and the governor cannot agree on a plan this year, it seems certain that one
or more interest groups will try to put something on the ballot in 2008. And
with voters inclined to support universal coverage, a proposal to overhaul the
health care industry would start with a significant amount of political good
will.
Back to top
Jordan Rau
Sacramento Democrats Merge Health Plans
Los Angeles Times
6/22/2007
California employers would be required to spend 7.5% of payroll
on the health of their workers, and the state could increase that
rate without legislative approval, under a plan announced Thursday
by the Capitol's two top Democrats.
The proposal, a merger of two measures that recently passed the
Assembly and Senate, would rely on businesses to reduce the number
of Californians without insurance. It lacks any requirement that
people obtain insurance — a cornerstone of Gov. Arnold Schwarzenegger's
proposed approach.
Republicans and business leaders have objected to the Democrats'
approach all year. But the leaders do not need their support to
move the new bill through the Legislature.
The bill would demand more of businesses than either the previous
Senate or Assembly measure. Companies that did not spend the requisite
amount would have to pay into a state fund that would provide insurance
to their workers. Assembly Speaker Fabian Nuñez (D-Los Angeles)
agreed to drop an exemption for small businesses and start-ups
that the Assembly had approved.
"The Democrats in this building are now united," said
Senate President Pro Tem Don Perata (D-Oakland), speaking at a
Capitol news conference.
The employer requirement would be nearly twice the 4% of payroll
that Schwarzenegger suggested in January. And the new bill would
make it easy for the rate to be increased above 7.5% without legislative
approval; it would empower an independent panel dominated by gubernatorial
appointees to make adjustments to keep up with rising medical costs.
"This plan will do nothing to address the rising costs of
healthcare and will only devastate our state's small businesses," said
the leader of the Assembly's Republicans, Michael Villines of Clovis.
Health insurance premiums rose 8.7% in California last year, according
to the California Health Care Foundation, an Oakland-based nonprofit
group. The average annual cost for employer-provided coverage for
a family was $11,860, the group says.
The Democrats' plan reflects confidence that they can prevail
in negotiations with Schwarzenegger as they seek to refine the
measure into one he will sign. The governor has promised a major
healthcare overhaul this year, and many Democrats believe that
he will be reluctant to veto what they place before him.
The governor's proposal, outlined in January, aims to spread the
financial burden of universal health insurance among employers,
hospitals and doctors through $4.4 billion in assessments — fees,
the governor says — on those industries.
Republican legislators have balked at that approach as well. And
no one in the business lobby or the healthcare industry has endorsed
the governor's plan, although Schwarzenegger has received international
praise for wanting to insure all Californians.
Further complicating Schwarzenegger's approach is an opinion from
the Legislature's nonpartisan lawyers that the levies on medical
providers are a tax, not a fee. The governor campaigned for reelection
last year on an anti-tax platform. And tax measures require some
Republican support to pass the Legislature.
But at his own news conference in a Sacramento neighborhood Thursday
morning, Schwarzenegger dismissed the significance of the legal
opinion.
"I don't get caught up in these details," he told reporters. "I
want to create healthcare for the people, and to me I look at it
as a fee, I stick with that. And if someone else wants to call
it something else, they can figure that out later on."
Schwarzenegger contended that "the only way that the healthcare
reform is going to work is if you have mandatory healthcare insurance" coupled
with a mandate that insurers not exclude anyone from coverage.
He praised "a great mood in the Capitol of working together" and
predicted a satisfying compromise before the Legislature adjourns
in September.
"What you see now is not really what counts," he said. "Always
what counts is, what is the outcome? And as you know, it can turn
very quickly … because in the end, like I said, everyone
wants to make this work."
Business lobbies faulted the Democratic plan for not doing enough
to keep healthcare costs down and for placing the financial onus
on employers to cover 3.4 million Californians who currently have
no health insurance.
The National Federation of Independent Business headlined its
statement objecting to the plan: "Merging of healthcare bills
tightens noose around necks of small-business owners."
The Coalition to Advance Healthcare Reform, a group of insurance
companies and large employers that already offer worker coverage,
issued a statement expressing "concerns" about the Democrats'
reliance on employers to fund their plan. They also said the plan
does not do enough to keep medical costs down.
In many ways, the Democratic proposal is a more comprehensive
version of California's last stab at healthcare reform, a 2003
law that required employers to provide insurance.
It was narrowly repealed the next year. Schwarzenegger supported
the repeal, saying the law — which would have applied only
to companies with at least 50 workers — was too burdensome
to business.
This year, Schwarzenegger has said he would support requirements
on business as long as other players in the healthcare industry
were required to share the cost of expanding coverage.
On Thursday, the Democrats said their bill, AB 8, does place some
burden on groups besides employers. Insurers would no longer be
allowed to deny policies to individuals, except those with the
most serious medical conditions. They would pay into a state pool
to take care of the sickest.
The bill also would ensure that all children in poor and working-class
families have health insurance, something the governor included
in his proposal.
"I think our bill is pretty consistent with [the governor's]
concept of shared responsibility," said Nuñez. "Everyone's
got a role to play here. Everyone's got to tighten their belt."
Back to top
Tom Chorneau
2 Bills Open Critical Debate on Health Care
San Francisco Chronicle
June 8, 2007
Two bills intended to overhaul California's distressed health
care system won preliminary passage Thursday in the state Legislature,
setting in motion more earnest negotiations with Gov. Arnold Schwarzenegger
on a variety of proposals for change.
The measures, one by Assembly Speaker Fabian Núñez,
D-Los Angeles, and the other from Senate President Pro Tem Don
Perata, D-Oakland, would extend coverage to 3.4 million working
Californians and their families who now lack health insurance.
Those two plans, along with proposals from the governor and other
lawmakers, now become the starting point for a contentious debate
over the best way to deliver and pay for health care in California.
Although Schwarzenegger and the Democratic leaders continue to
be optimistic that agreement can be reached this year, there's
growing skepticism among many political insiders that the challenge
will be met.
"I think there will be some changes made in the health care
system, but they will be piecemeal and certainly not a complete
overhaul," said Garry South, a longtime Democratic consultant
and onetime top aide to former Democratic Gov. Gray Davis.
"As Hillary Clinton found out, there's some heavy political
reality that one has to deal with in trying to inject massive change
to the health care system," he said.
So far, as South and others noted, the plans have yet to navigate
the concerns of the many interest groups entrenched within California's
$167 billion health care system.
Schwarzenegger's plan, released in January, would share the burden
of extending care to all of the state's uninsured residents, requiring
all but the smallest employers to provide health insurance or pay
4 percent of payroll into a pool for purchasing policies.
The governor would require all Californians to have insurance
and require insurance companies to accept all applicants, regardless
of any pre-existing health conditions. He would expand government
programs to include more of the working poor and ask doctors and
hospitals to pay a new tax to help expand the system.
But the governor's plan has not yet been introduced as a bill
in the Legislature and thus, to some degree, has avoided direct
assault from critics.
The two bills offered by the Democratic leaders, which passed
with almost no Republican support, are virtually identical and
are expected to be merged into a single proposal.
Unlike the governor's plan, the Democrats would cover only about
two-thirds of the uninsured population. Their plans require employers
to pay a 7.5 percent payroll tax while also requiring workers to
pay up to 4.5 percent of their income toward the cost of coverage.
The Democrats also would expand existing government health care
programs and cap the profits of insurance carriers.
Daniel Zingale, a senior adviser to the governor on health care
issues, noted that there is a lot of common ground between Schwarzenegger
and the Democrats.
"A year ago, no one expected that there could be a major
reform effort on health care," he said, noting that now not
only has the governor made a proposal but there have also been
plans from the Democratic legislative leaders, a single-payer plan
and ideas put forward by Republicans.
The single-payer plan, which also won passage this week from the
state Senate, would do away with private insurance and replace
it with a system overseen by the state that would provide health
care to all residents.
Schwarzenegger vetoed a nearly identical bill last year and has
said his mind has not changed. The plan still has strong support
from the Democratic majority, although the bill's author, Sen.
Sheila Kuehl, D-Santa Monica, has said she might hold off bringing
it forward until next year.
Most of the focus now is on the negotiations between the governor
and Democratic leaders.
Interest groups -- from hospitals and doctor groups to business
and insurance organizations as well as labor unions -- have been
unusually cooperative so far.
Perata acknowledged Thursday that as an agreement between the
governor and lawmakers begins to take shape, lobby groups will
increasingly begin operating in their own interests.
"The progress that we've made up to now is all gravy as far
as I'm concerned," he said. "We will get to a point where
we will look into everyone's eye and we'll say, 'Blink or don't
blink.' And some will blink, and we'll have to go forward with
those who remain."
Frank Schubert, a longtime Republican political consultant who
has run several health care-related campaigns, repeated a warning
made by many health care and business groups in recent weeks.
"Health care reform is very difficult because there's enormous
consequences," he said. "When you start messing around
with the current insurance market that covers about 20 million
people, you have to be careful."
------------------------------------------------------------------------
Comparing proposals
A comparison of the health care plans proposed by Gov. Arnold
Schwarzenegger, state Sen. Sheila Kuehl, D-Santa Monica, Senate
President Pro Tem Don Perata, D-Oakland, and Assembly Speaker Fabian
Núñez, D-Los Angeles:
WHO'S COVERED
The governor's plan aims at expanding coverage to 6.5 million
uninsured residents. Kuehl's plan would establish a new system
for all California residents. Perata and Núñez have
plans to extend coverage to 3.4 million working families that do
not currently have health insurance.
HOW THE PLANS WORK
The governor's plan requires all Californians to get coverage
from a private insurer or from an existing government program.
Kuehl's plan would replace private insurance with a single-payer
system managed by the state. Perata and Núñez have
each proposed plans that would require all but the smallest employers
to provide insurance to workers; both plans also would expand government
programs to include more low-income or unemployed residents.
COST
The governor's plan requires that individuals have at least a
minimum policy with a $5,000 deductible and maximum out-of-pocket
payment of $7,500 per person. Employers with 10 or more workers
must offer coverage or contribute 4 percent of payroll into a purchasing
pool. The governor also would impose a revenue tax on providers
-- 2 percent on doctors and 4 percent on hospitals.
Kuehl's plan imposes a payroll tax of 8 percent on employers and
4 percent on workers.
Perata and Núñez would impose a 7.5 percent payroll
tax on employers. Workers would be asked to pay up to 4.5 percent
of income or no more than $288 per month for a family of four on
an annual income of $103,000.
KEY CRITICISMS
The governor's plan would rely too heavily on the taxes on doctors
and hospitals to help pay for new coverage. Insurance companies
also would be required to accept any applications, regardless of
pre-existing health conditions. Kuehl's plan might require additional
new taxes to pay for services if planned sources of revenue cannot
keep pace with medical inflation.
Neither plan from Perata or Núñez covers all of
the uninsured. There are also concerns that employers are being
asked to carry too large a burden of the cost, even as some believe
the coverage that workers would be asked to pay for would also
be too expensive.
Back to top
David Lazarrus
Let Voters Reform Health Care
San Francisco Chronicle
June 8, 2007
Passage of SB840 -- a bill that would guarantee health coverage
for all Californians -- by the state Senate this week is a significant
victory for all those who believe health care is a right, not a
privilege. But that may still be wishful thinking.
It's unclear how SB840, authored by state Sen. Sheila Kuehl, D-Santa
Monica, will fare in the Assembly. And even if it's passed by the
full Legislature, as was the case last year, it almost certainly
would face a veto by Gov. Arnold Schwarzenegger, as was the case
last year.
So I say this: Let the people decide. If our lawmakers can't or
won't recognize the urgent need for universal coverage, then it's
time to repackage SB840 as a ballot initiative and put it to a
vote by those most directly impacted by our obscenely dysfunctional
health care system -- us.
For her part, Kuehl told me that she still wants to try her luck
in the Legislature before taking SB840 straight to voters.
"Ballot initiatives should be brought only when the tipping
point is reached," she said. "I think a lot more education
has to be done so that people understand why this bill is the gold
standard for health care."
Well, school's about to start. On June 29, Michael Moore's new
documentary, "Sicko," hits theaters. It's said to offer
a devastating depiction of the roughly 47 million Americans who
lack health insurance and to make a powerful case for universal
coverage.
Moore will screen "Sicko" in Sacramento on Tuesday and
participate in a legislative briefing at the Capitol. He's also
scheduled to join Kuehl at an afternoon rally that organizers hope
will draw more than 1,000 supporters of universal coverage.
"This movie is going to have a big impact on the movement," Kuehl
said. "It will be a major indictment of the insurance industry
and what they're doing to us."
After SB840 passed 23-15 in the state Senate on Wednesday afternoon,
Moore issued the following statement:
"The health care industry has a death grip on our society
because the insurance companies put profits before patients, which
is why we as a country spend considerably more on health care than
other developed countries and get back far less.
"In recognizing that for-profit insurance is incompatible
with a caring, a moral and a high-quality health care system that
provides coverage for all, Sen. Kuehl is leading the fight to break
the industry's death grip."
The timing has never been more auspicious for health care reform
in both California and the nation. The issue is consistently polling
at or near the top of voters' concerns, and politicians have been
busy cobbling together a variety of plans for how things could
be different.
But most of those plans envision expanding our current system
to cover most (but not necessarily all) of the uninsured. They
don't address the nagging problem of ever-increasing health care
costs, nor do they remedy the extraordinary fact that an estimated
one-third of all health care spending is squandered on bureaucratic
overhead.
SB840 would tackle these issues only on a statewide basis. But
this would be a start, and it would demonstrate for the rest of
the country that universal coverage is both politically and economically
feasible.
"It's the only sensible approach," said Rose Ann DeMoro,
executive director of the 75,000-member California Nurses Association. "It
takes away the power of the insurance companies and essentially
creates an expanded Medicare system."
SB840 would establish what's called a single-payer insurance system
for all Californians. In other words, tax dollars would create
a pool of publicly administered funds that would be applied to
covering medical treatment for state residents.
This would replace the existing employer-based system and private
insurers' premiums, deductibles and co-pays.
A 2005 study by the Lewin Group, a health care consulting firm,
found that a government-run system as envisioned by Kuehl's legislation
would cover the almost 7 million Californians now without insurance
while saving about $8 billion.
Rival plans put forward by Schwarzenegger and Democratic leaders
in Sacramento would seek to extend coverage to the uninsured by
having employers contribute varying amounts to a state pool.
The insurance industry, meanwhile, is also championing reform
-- but only to the extent that reform means enlarging its customer
base, not introducing a single-payer system. Insurers and their
allies are already blitzing the airwaves with ads touting favored
proposals.
So would a ballot initiative work? It wouldn't be easy.
"Insurers would spend hundreds of millions of dollars to
defeat it," observed Jerry Flanagan, health care policy director
at the Foundation for Taxpayer and Consumer Rights, a Southern
California consumer advocacy group.
"They'd attempt to focus people on tax increases and drown
out that this would be far less than what people now pay in premiums
and deductibles," he said.
A Field Poll found in January that 81 percent of voters believe
that government should be responsible for ensuring "that all
Californians have access to affordable health care insurance."
At the same time, though, more voters (42 percent) would choose
to receive coverage from an employer than from the government (22
percent), the poll found.
Flanagan interprets these numbers to indicate that California
voters don't yet understand the nuts and bolts of a single-payer
system, or the savings that would be achieved under a government-run
insurance program.
The onus would be on reform advocates to educate voters about
the facts amid what would undoubtedly be an all-out campaign by
insurers to maintain the status quo.
I think people are smart enough to tell right from wrong, and
to know what's in their best interest.
If state lawmakers are unclear on the concept, let us have a say
about California's health care future. It's our money, after all.
And our lives.
Back to top
Jordan Rau
Proposal: Get Health Insurance or Pay Fine.The Schwarzenegger administration
considers putting teeth in its plan to require coverage for
all.
Los Angeles Times
April 11, 2007
SACRAMENTO ˜ People who refuse to obtain health insurance could be tracked
down by the state or a private contractor, enrolled in a plan and fined until
they pay their premiums under one proposal Gov. Arnold Schwarzenegger's administration
is considering as part of his vision for covering all Californians.
The proposal, which administration aides said was one of many the governor was
considering, was presented at a meeting Tuesday with representatives from insurers,
hospitals, doctors, business groups and consumer advocates.
It drew immediate criticism from critics of the central tenet of Schwarzenegger's
healthcare approach, which is to require all Californians to obtain insurance.
Although the governor's office has been emphasizing the efforts it would make
to help people find insurance voluntarily ˜ including subsidies to the
poor and outreach through schools, state agencies and healthcare providers ˜ the
outlines of the enforcement proposal inflamed some of those the administration
has been courting for support.
Beth Capell, a lobbyist for the Service Employees International Union's California
organization, said the fines might be unfairly levied on people caught without
health insurance because of circumstances beyond their control. Those included
people in between jobs and those starting employment in companies that did not
provide healthcare for the first months of work.
"We're going to punish them if they don't go out and buy health insurance
on their own ˜ health insurance that they can't afford at the moment that
they are least able to afford it," Capell said.
Other proposals, which Schwarzenegger included in the first draft of his healthcare
plan, are to attach the wages of people who don't buy insurance and to increase
the amount they owe in state income taxes.
Kim Belshé, secretary of the state Health and Human Services Agency, emphasized
that "nothing is set in stone." But Schwarzenegger's call for "shared
responsibility" includes a need for everyone to be part of the insurance
system, she said.
The proposal to locate people without insurance would use state or private databases
and target those who lacked coverage for 60 days or more. The administration
said the goal was to be helpful and the initial notification would be designed
to alert people to the need for insurance and provide ways for them to find coverage.
Only those who still did not obtain insurance would be subject to involuntary
measures.
"It represents one approach to enforcement," Belshé said of
the proposal. "But I want to underscore the emphasis of the governor and
the administration is on enrollment, and creating a culture of coverage that
connects people to affordable, available health coverage."
With more than 6 million residents lacking medical coverage in California, the
requirement to obtain health insurance is one of the most contentious points
of Schwarzenegger's plan.
Schwarzenegger wants to offer public subsidies to the least affluent Californians.
But many Democratic legislators, unions and consumer advocates have objected
that others will not be able to afford even the bare-bones, high-deductible plans
that Schwarzenegger would require as a minimum, which cost $1,200 a person a
year.
Those plans would include deductibles as high as $5,000 on top of the premiums,
and would be geared toward protecting people from the costs of catastrophic medical
bills, such as those arising from surgery or cancer treatment.
An alternative plan by Senate President Pro Tem Don Perata (D-Oakland) also includes
an insurance requirement. Those who did not obtain insurance would be unable
to claim a credit on their income taxes of perhaps less than $100.
A proposal by Assembly Speaker Fabian Nuñez (D-Los Angeles) does not include
an insurance requirement.
Peter Harbage, a senior program associate with the nonpartisan think tank the
New America Foundation, said relatively few people would have to be forced to
buy insurance. Schwarzenegger has cited the foundation's research in helping
to frame his plan.
"Most people are going to have insurance if the program is well designed
and well constructed," he said in an interview Tuesday. "And then you're
going to have some people who are bad actors, and that's where you need some
sort of tracking system."
The governor said he is studying as a possible model a new system the state Department
of Motor Vehicles is using to locate drivers who lack automobile insurance. Another
model, he said, is the one the state uses to track down people who don't pay
child support.
"There's no easy way to come up with a tracking model," he said. "It's
going to take some thought and it's going to be complex."
Work on the healthcare issue, which Schwarzenegger has identified as his top
priority for the year, has been moving slowly. Republicans in the Legislature
have offered their own ideas, none of which require employers or individuals
to buy insurance. Democrats are still trying to determine how much their alternatives
would cost.
In an effort to build consensus among insurers, hospitals, doctors and consumers,
the administration has been having private briefings in recent weeks.
Back to top
Daniel Weintraub
One Health Care Plan—Kuehl's—Is
Really Different
Sacramento Bee
March 1, 2007
Gov. Arnold Schwarzenegger and California's legislative
leaders have proposed ways to shore up our current, employer-based
health care system with new mandates, taxes and subsidies to cover
more people. Republican lawmakers are pushing for incentives to
bolster private choice and responsibility. But one plan proposed
in the Legislature stands out as radically different from the rest.
Senate Bill 840 by Sen. Sheila Kuehl, D-Santa Monica,
would scrap the status quo and replace it with a government-run,
single-payer system providing comprehensive health care benefits
for all, financed by taxes and free to patients at the point of
service.
"California needs a system of truly universal
health care now more than ever," Kuehl said this week as she
reintroduced her bill, which Schwarzenegger vetoed last year. "This
is not the time to wait patiently for universal health care. It's
time to move forward."
Kuehl's plan would mean a vast increase in the
power of government over the health care industry and the way services
are planned and delivered. Hers is the only proposal on the table
that seeks to directly limit the cost of health care. It would
do so by setting an annual budget and then enforcing it through
negotiations with doctors, hospitals, labs and pharmaceutical companies,
or by hiring health plans to provide benefits at a set cost.
Those benefits would be comprehensive. The plan
would cover primary care, preventive care, outpatient and hospital
care. It would cover mental health, dental, vision, podiatry, chiropractic
care, acupuncture, substance abuse and prescription drugs. Even
faith healing. Long-term nursing home care would not be covered.
What would all this cost? One detailed economic
study, by the Lewin Group, concluded that the plan could be financed
simply by redirecting all of the money Californians and the federal
government already spend on health care in the state. Care for
those not covered now would be paid for with savings in administrative
costs and the elimination of insurance company advertising
and profits.
On a practical level, that would mean payroll taxes
of about 4 percent for workers and 8 percent for employers, a 12
percent tax on the self-employed, a 3.5 percent tax on investment
income and a 1 percent income tax surcharge on Californians earning
more than $200,000 a year, the Lewin study said.
The program would be administered by a universal
health care commissioner appointed by the governor, and an office
of patient advocacy, an office of health planning, an office of
health care quality, a public advisory committee and a payments
board.
The commissioner and his or her staff would be
responsible for setting the budget each year and sticking to it.
They would establish a list of approved drugs for which the state
would pay and try to use the power of 37 million customers to drive
prices down. They would decide the appropriate number of specialists
and general practice doctors in each region of the state, distribute
money for the construction of new clinics and hospitals, and evaluate
new medical technology to decide whether it should be paid for
as part of the state plan.
The commissioner would be required by law to try
to limit the growth in costs to the growth in the state's economy
and population. This would be crucial because the taxes to support
the program would grow at about that same rate as the economy.
But with an aging population demanding more care than Californians
receive today, it would be difficult to keep the system in fiscal
balance for very long. Within 10 years, the independent study of
the plan showed, costs would outstrip revenues by $70 billion unless
current trends could be arrested.
One big cost challenge would be the system's reliance
on fee-for-service medicine, in which doctors would provide whatever
care they deemed appropriate and then bill the state. The private
insurance industry has largely abandoned that practice in favor
of more managed, coordinated systems to try to control costs. Doctor
fees in the single-payer system would be set by the state, but
it would be difficult to prevent physicians from providing more
care to maintain their incomes.
Kuehl said the new program would have a strong
anti-fraud enforcement unit, but, ultimately, it would leave broad
discretion in the hands of physicians.
"We have to trust that doctors are providing
the services that are needed," she said.
If costs did start to rise faster than revenues,
the commissioner could postpone new benefits, decrease existing
benefits, suspend capital improvements, reduce payments for prescription
drugs or even impose co-payments and deductibles. If none of that
worked, the commissioner could ask the Legislature to raise the
tax rates to provide more revenue.
Kuehl said this week she does not intend to amend
her bill in a compromise with the governor and legislative leaders
because it is a concept so different from theirs. While she does
not expect Schwarzenegger to sign her bill, she says the next governor
might. Or she and the plan's supporters might take their cause
to the voters.
"The facts are on our side," she said. "The people
are on our side."
Back to top
Jordan Rau
Coalition to Support a California Healthcare Plan
Los Angeles Times
February 6, 2007
In a boost to Gov. Arnold Schwarzenegger's political priority
for the year, some of the biggest players in the state's healthcare
industry have agreed to commit millions of dollars to a campaign
for universal healthcare access.
The yet-unnamed alliance, which plans to announce its creation
today, includes a labor giant, the Service Employees International
Union; the state's largest doctors lobby, the California Medical
Assn.; the state's biggest nonprofit hospital chain, Catholic Healthcare
West; and three major insurers: Kaiser Permanente, Blue Shield
of California and Health Net.
"For the first time ever, the major players are not in their
bunkers throwing grenades at each other," said Joe Dunn, chief
executive of the California Medical Assn. "Everyone is coming
together in a sincere effort to work out a plan for reforming medicine
in California in a way that works to improve patients' ability
to be treated by their doctor."
The coalition's members have not agreed to support all elements
of any plan that emerges from negotiations with Schwarzenegger
and the Legislature, and in fact several have expressed concerns
about the governor's proposal. But the alliance members said they
would support the effort to ensure access to medical care for all
Californians and have accepted Schwarzenegger's notion of "shared
responsibility" — that all participants in healthcare,
including patients, insurers and businesses, must give up something.
The alliance's formation is intended to counter any campaign that
arises to block an overhaul of the state's healthcare system. Such
concerns are not hypothetical: A referendum paid for mostly by
business groups in 2004 was able to nullify California's last major
effort at expanding medical insurance by repealing a law that would
have required all mid- and large-size employers to provide coverage.
Last month, a conservative small-business group aired television
ads saying Schwarzenegger's healthcare plan would "throw your
tax dollars away on a big government bureaucracy."
The new alliance does not include members who helped repeal the
last law in 2004, but organizers said they hoped to expand its
reach in coming weeks and establish as broad a coalition as possible.
Although most of the members of the alliance supported the previous
healthcare law, which in fact was written by the California Medical
Assn. and labor, all have much to lose as well as gain if Schwarzenegger's
proposal becomes law.
His plan includes a 2% levy on doctors' profits and a 4% fee on
hospital operations. Insurers would have to provide coverage to
all who wanted it, regardless of their healthcare history, and
also would face limits on profits.
"We didn't want to see comprehensive proposals picked apart
by people who object to one piece of it," said Tom Epstein,
a spokesman for Blue Shield. The alliance, he said, "requires
negotiating in good faith and accepting that we're all going to
have to compromise and not stick it to each other to get what we
want."
Participants have not committed to specific amounts of money to
put into the campaign, organizers said, but will at a minimum be
able to run a multimillion-dollar campaign.
Schwarzenegger has been trying to build support and was to meet
with the California Business Roundtable's board today but so far
has not won such a strong commitment as the new alliance's to finding
a solution to the high costs of health insurance and the 6 million
people who lack coverage.
Schwarzenegger spokesman Adam Mendelsohn praised the formation
of the alliance.
"You're seeing a coalition of opposites ignite because they
all believe the healthcare system is broken," he said. "That's
a very dramatic statement."
Back to top
George Skelton
GOP Leaders Offer Governor a Prescription
for Expanding Health Coverage
Los Angeles Times
February 1, 2007
Although they flatly rejected Gov. Arnold Schwarzenegger's
healthcare proposal, Senate Republicans did the governor one favor.
They showed him how to maneuver around a big stumbling block to
any major expansion of medical coverage in California.
There are two big obstacles to GOP support for any major overhaul of medical
coverage: Insuring illegal immigrants and raising taxes.
The governor wants to require everybody in California to carry health insurance,
including illegal immigrants. People who couldn't afford it would get state subsidies.
Republicans don't want to provide state money to insure even illegal immigrant children.
"As soon as you open that door, you're not just talking about people coming
from Mexico," says Senate GOP leader Dick Ackerman of Irvine. "If California
had a plan like that, anyone who got sick anywhere in the world would come to
California. We can't be the hospital for the world."
Schwarzenegger and Assembly Speaker Fabian Nuñez (D-Los Angeles) make
the practical argument that illegal immigrants, insured or not, already are entitled
by federal law to costly care at overcrowded hospital emergency rooms. And everyone
else - taxpayers, policyholders, medical providers - gets stuck with the bill.
There also are the self-protection and humane arguments: We should make sure
California's estimated 2.5 million illegal immigrants are healthy so they don't
spread germs. They're here because we're hiring them; morally we owe them healthcare.
The beauty of the Senate Republicans' modest healthcare proposal is that it resolves
the dilemma posed by each argument without breaking the GOP taboo against providing
insurance for illegal immigrants.
Under the GOP plan, the uninsured - here legally or not - would be shifted to
a greatly expanded network of medical clinics for nonemergency care. In emergencies,
people still would be treated at emergency rooms. But the clinics would be more
accessible and provide much less expensive basic care than the ERs.
"We disagree with the concept of providing health insurance policies to
the undocumented," Sen. George Runner (R-Lancaster) told reporters Tuesday
at the GOP plan's unveiling. "We do agree with the governor, though, that
use of the emergency rooms is an extremely expensive way to deliver healthcare.
And so that's why we [want to] move populations into clinics ... the undocumented,
underinsured, insured."
Schwarzenegger seemed receptive to the idea Wednesday at a Capitol news conference.
In fact, his universal healthcare plan includes a provision for expanding clinics.
"I understand where they're coming from," the governor said of his
fellow Republicans' opposition to insuring illegal immigrants. "My point
is that there's a cheaper way" to provide the federally mandated care, he
continued. "No one can be turned away ... and everyone has to get treatment,
whatever it may be.
"But we can send a lot of patients, maybe 90% ... to a clinic.... Let's
try to find a way to do it cheaper and not burden the taxpayers ... because a
lot of the big money is a waste. A lot of people visit those emergency rooms
[and] don't need to.... They only go because they have no coverage."
The Schwarzenegger administration says that the cost of treating strep throat
is $72 at a clinic, $91 in a doctor's office and $328 in an emergency room.
The governor also says that an average California family pays an extra $1,186
in premiums to reimburse medical providers stiffed by the uninsured. And he maintains
that businesses pay a similar "hidden tax" of "a staggering $14.7
billion a year."
Proposed solutions are highly complex and mostly controversial - even expansion
of the clinics.
Republicans would finance the clinics by seizing $2 billion that goes to hospitals
for treating underinsured patients. (The hospitals could recoup by operating
the clinics.) They'd also take perhaps $300 million of the tobacco taxes now
used for children-related programs. And they'd pare Medi-Cal for poor people
when their coverage exceeded benefits of private plans.
Moreover, the clinics would be operated by nurses rather than doctors. Critics
charge that would mean second-class treatment for patients.
But all this is negotiable between the governor and Legislature - and a horde
of medical, business, insurance and labor lobbyists now encamped around the Capitol.
What is not negotiable, Republicans say, is anything that smacks of a tax increase.
Schwarzenegger proposes to sock doctors and hospitals, along with most businesses
that don't offer health insurance, with $4.5 billion in "fees" to help
finance his plan.
"I don't care if it's a 'tax' or a 'fee,' we don't support that method of
funding," Ackerman says, speaking for Senate Republicans.
Any tax hike requires a two-thirds vote of each house and thus some Republican
support. Ruling Democrats could decree the tax to be a "fee" and pass
it on a simple majority, party-line vote. But Republicans say Schwarzenegger
has assured them he won't accept a bill without GOP backing. And a gubernatorial
advisor confirms it.
"The governor has made clear that he wants a bill with Republican and Democratic
support. It must be bipartisan," says communications director Adam Mendelsohn.
That's a sharp shift from last year, when the governor and Democrats enacted
major legislation - global warming, minimum wage, prescription drugs - over bitter
GOP opposition.
Runner says that if Schwarzenegger tries that with healthcare legislation, "he'll
never have healthcare on his legacy." That's because without a broad, bipartisan
coalition behind it, any plan is bound to face court challenges and perhaps a
repeal effort at the ballot.
So Schwarzenegger needs GOP support. Credit Senate Republicans with showing him
how to get it on the emotional issue of illegal immigrants: Treat their routine
ailments, without insurance, in low-cost clinics. It's not brain surgery.
Back to top
Daniel Weintraub
Republican Health Plan Offers Some Good Ideas
Sacramento Bee
February 1, 2007
The Republicans in California's state Senate are
the weakest of all the power blocs in the Capitol, their numbers
so small that their views are often little more than an afterthought
when lawmakers deliberate policy. Democrats today are just two
votes short of the two-thirds majority they would need to do anything
they like in the Senate, and at crunch time, either the Democratic
leaders or the Republican governor can usually find those two votes
if they need them.
So to say that the Senate Republican proposal on health care released Tuesday
is viable as a policy proposal would be fantasy. The plan has no chance of being
approved as written. It won't even get out of its first committee.
But the proposal is worth examining all the same. First, it establishes a benchmark
on the right end of the ideological spectrum. We have not yet heard from the
Republicans in the state Assembly, so for now, this plan will serve as a guide
to what the best and brightest conservative minds in California want to do --
and not do -- about health care. The other reason the plan is worth paying attention
to is that it contains some genuinely good ideas.
Chances are, if Gov. Arnold Schwarzenegger and the Democrats who control the
Legislature get into serious negotiations about a health care overhaul this summer,
they are going to want to bring some Republican votes into the fold. They might
have to, if the charges Schwarzenegger is proposing for doctors, hospitals and
employers are considered to be tax increases, which require a two-thirds majority
to pass in the Legislature.
To have even a chance of getting those votes, they'll have to include some ideas
such as the kind the Senate Republican leadership has rolled out.
First, let's be clear on what this plan is not. It is not universal health insurance.
It is not a comprehensive plan to cover most of those without insurance now.
The plan does not require anyone to buy insurance, nor does it require anyone
to provide it.
It is, instead, a collection of tax credits, fund shifts, deregulation and incentives
designed to make health care more affordable and more accessible to more people.
It would preserve and build upon the private system now in place, augmenting
it with expanded government programs and subsidies where gaps in coverage exist.
"We don't believe in mandates," Senate Republican Leader Dick Ackerman
of Orange County said Tuesday.
The plan seeks to expand access to care by increasing the use of community clinics,
which would get some state money that now goes to hospitals that care for the
uninsured. Clinics would be encouraged to stay open later at night and on weekends
to relieve pressure on emergency rooms.
Hospitals would be allowed to run clinics offering care to people who don't need
all the services of an emergency room, and nurse practitioners would be given
more leeway to establish and run clinics without a doctor present. The plan also
would increase reimbursement rates for doctors who care for the poor as part
of the state's Medi-Cal program while saving money by reducing the scope of benefits
offered by the program to bring them into line with the typical private plan
in California.
The Republican senators also want to shift about a half-billion dollars a year
in tobacco tax money that now goes to various children's programs and spend it
on children's health care instead. This idea, which would reorient the spending
under an initiative originally sponsored by Hollywood director Rob Reiner, would
require voter approval, and the Republicans propose to put the idea on the ballot
in 2008.
The plan also proposes expanding Health Savings Accounts, through which individuals
can purchase high-deductible insurance coverage meant mainly to protect them
from financial ruin in the event of an unexpected illness or injury. The Republicans
would allow contributions to these plans to be tax deductible in California as
they already are in most other states, and the proposal would give employers
a tax credit for making contributions to their workers' plans.
All of these ideas are feasible -- and most could find a place in a compromise
plan, even if the final package goes considerably further than the Senate Republicans
would like to go. The idea of shifting tobacco tax money to children's health
care won't fly, but don't be shocked if a compromise plan includes a tobacco
tax increase for that purpose.
The Republican proposal would not be comprehensive. It does not seek to cover
about 1 million uninsured Californians who already qualify for public plans,
about 1 million who make more than $50,000 a year and could, Ackerman says, afford
it now, and about 2.5 million illegal immigrants.
The plan, said Sen. Sam Aanestad, a Grass Valley dentist, "recognizes the
fact that taxpayers cannot afford insurance for everyone, but we can certainly
provide access for everyone in need." Others will dispute that assessment
of this plan's potential. But it's an excellent start -- and it includes some
creative ideas for expanding coverage without raising taxes.
Although they flatly rejected Gov. Arnold Schwarzenegger's
healthcare proposal, Senate Republicans did the governor one favor.
They showed him how to maneuver around a big stumbling block to
any major expansion of medical coverage in California.
There are two big obstacles to GOP support for any major overhaul of medical
coverage: Insuring illegal immigrants and raising taxes.
The governor wants to require everybody in California to carry health insurance,
including illegal immigrants. People who couldn't afford it would get state subsidies.
Republicans don't want to provide state money to insure even illegal immigrant children.
"As soon as you open that door, you're not just talking about people coming
from Mexico," says Senate GOP leader Dick Ackerman of Irvine. "If California
had a plan like that, anyone who got sick anywhere in the world would come to
California. We can't be the hospital for the world."
Schwarzenegger and Assembly Speaker Fabian Nuñez (D-Los Angeles) make
the practical argument that illegal immigrants, insured or not, already are entitled
by federal law to costly care at overcrowded hospital emergency rooms. And everyone
else - taxpayers, policyholders, medical providers - gets stuck with the bill.
There also are the self-protection and humane arguments: We should make sure
California's estimated 2.5 million illegal immigrants are healthy so they don't
spread germs. They're here because we're hiring them; morally we owe them healthcare.
The beauty of the Senate Republicans' modest healthcare proposal is that it resolves
the dilemma posed by each argument without breaking the GOP taboo against providing
insurance for illegal immigrants.
Under the GOP plan, the uninsured - here legally or not - would be shifted to
a greatly expanded network of medical clinics for nonemergency care. In emergencies,
people still would be treated at emergency rooms. But the clinics would be more
accessible and provide much less expensive basic care than the ERs.
"We disagree with the concept of providing health insurance policies to
the undocumented," Sen. George Runner (R-Lancaster) told reporters Tuesday
at the GOP plan's unveiling. "We do agree with the governor, though, that
use of the emergency rooms is an extremely expensive way to deliver healthcare.
And so that's why we [want to] move populations into clinics ... the undocumented,
underinsured, insured."
Schwarzenegger seemed receptive to the idea Wednesday at a Capitol news conference.
In fact, his universal healthcare plan includes a provision for expanding clinics.
"I understand where they're coming from," the governor said of his
fellow Republicans' opposition to insuring illegal immigrants. "My point
is that there's a cheaper way" to provide the federally mandated care, he
continued. "No one can be turned away ... and everyone has to get treatment,
whatever it may be.
"But we can send a lot of patients, maybe 90% ... to a clinic.... Let's
try to find a way to do it cheaper and not burden the taxpayers ... because a
lot of the big money is a waste. A lot of people visit those emergency rooms
[and] don't need to.... They only go because they have no coverage."
The Schwarzenegger administration says that the cost of treating strep throat
is $72 at a clinic, $91 in a doctor's office and $328 in an emergency room.
The governor also says that an average California family pays an extra $1,186
in premiums to reimburse medical providers stiffed by the uninsured. And he maintains
that businesses pay a similar "hidden tax" of "a staggering $14.7
billion a year."
Proposed solutions are highly complex and mostly controversial - even expansion
of the clinics.
Republicans would finance the clinics by seizing $2 billion that goes to hospitals
for treating underinsured patients. (The hospitals could recoup by operating
the clinics.) They'd also take perhaps $300 million of the tobacco taxes now
used for children-related programs. And they'd pare Medi-Cal for poor people
when their coverage exceeded benefits of private plans.
Moreover, the clinics would be operated by nurses rather than doctors. Critics
charge that would mean second-class treatment for patients.
But all this is negotiable between the governor and Legislature - and a horde
of medical, business, insurance and labor lobbyists now encamped around the Capitol.
What is not negotiable, Republicans say, is anything that smacks of a tax increase.
Schwarzenegger proposes to sock doctors and hospitals, along with most businesses
that don't offer health insurance, with $4.5 billion in "fees" to help
finance his plan.
"I don't care if it's a 'tax' or a 'fee,' we don't support that method of
funding," Ackerman says, speaking for Senate Republicans.
Any tax hike requires a two-thirds vote of each house and thus some Republican
support. Ruling Democrats could decree the tax to be a "fee" and pass
it on a simple majority, party-line vote. But Republicans say Schwarzenegger
has assured them he won't accept a bill without GOP backing. And a gubernatorial
advisor confirms it.
"The governor has made clear that he wants a bill with Republican and Democratic
support. It must be bipartisan," says communications director Adam Mendelsohn.
That's a sharp shift from last year, when the governor and Democrats enacted
major legislation - global warming, minimum wage, prescription drugs - over bitter
GOP opposition.
Runner says that if Schwarzenegger tries that with healthcare legislation, "he'll
never have healthcare on his legacy." That's because without a broad, bipartisan
coalition behind it, any plan is bound to face court challenges and perhaps a
repeal effort at the ballot.
So Schwarzenegger needs GOP support. Credit Senate Republicans with showing him
how to get it on the emotional issue of illegal immigrants: Treat their routine
ailments, without insurance, in low-cost clinics. It's not brain surgery.
Back to top
California Health Plan Has Budget Hawks Antsy
Los Angeles Times
January 29, 2007
California Gov. Arnold Schwarzenegger wants $3.7
billion a year in new federal funding to cover a big chunk of his
health-care plan for his state, putting him on a collision course
with budget hawks in the nation's capital and leaders in other
states seeking assistance.
The sheer size of the federal allocation Schwarzenegger's
plan would require is raising eyebrows.
"That's a big number on an annual basis," said
Sen. Judd Gregg of New Hampshire, the ranking Republican on the
Senate Budget Committee. "California hasn't yet passed a law
(implementing the governor's plan), but when they do, I would think
people are going to take a deep breath."
The cost of helping states fund their health plans
has attracted the attention of budget cutters, because it is complicating
President Bush's stated goal of balancing the federal budget in
five years. In his new budget, scheduled to go to Congress on Monday,
Bush is expected to call for a substantial slowdown in federal
health-care spending. Some of the cuts Bush proposes could affect
programs Schwarzenegger is counting on to help pay for his plan,
such as Medicaid.
Because California is the most populous state,
its plan is by far the largest. But four other states are pursuing
initiatives to provide health insurance for all their residents.
More are expected to follow this year. That could set off a scramble
for increasingly scarce federal dollars.
"When they do the math and figure out just
exactly how much federal money will be flowing to California ...
some people will say, 'Why should California get it, and other
states get nothing?' " said health
economist Len Nichols, of the nonpartisan New America Foundation.
Nichols and other experts say state attempts to
reform health care are likely to require tens of billions of dollars
in additional spending in two federal programs that operate as
partnerships with the states -- Medicaid and the State Children's
Health Insurance Program, or S-CHIP. These programs are different
in every state, and they operate under a complex series of laws,
rules and formulas for federal matching funds.
Medicaid is the nation's main health-care program
for the poor, paying for medical and long-term care for more than
55 million people, according to the Kaiser Family Foundation. S-CHIP
covers as many as 6 million children a year, mostly from low-income
working families that earn too much to qualify for Medicaid.
Washington may struggle to deal with demands for
more money from California and other states, but some experts say
federal policymakers in effect asked for it by taking little or
no action to address the problems of the 47 million Americans who
have no health insurance.
"The reason this is being discussed in a serious
way in Sacramento is because it really isn't being confronted in
Washington," said
Marian Mulkey, a health-insurance expert with the California HealthCare
Foundation. "If (Washington) reacts negatively, it might just
call the question of 'What do they want to do next?' What is Washington
doing to address this, if this kind of state solution isn't workable?"
Bush pledged in his State of the Union address
last week to work with states to cover the uninsured. But he made
no commitment for more federal money -- only redirection of some
existing accounts.
Overall, Schwarzenegger counts on federal coffers
to provide about $5.5 billion of the $12 billion first-year cost
of his plan. Of that federal money, state officials say, $3.7 billion
would be new spending and the rest would be redirected from existing
payments.
California officials say the state is entitled
to nearly all of the $3.7 billion in new spending under current
Medicaid and S-CHIP rules.
Medicaid is an entitlement program, meaning it
is not subject to Congress' annual appropriations process. Instead,
the federal government has committed by law to match state spending
within given limits. The coverage expansions that Schwarzenegger
is proposing for low-income children, pregnant women and some other
adults are within those limits, state officials say, as are
increases in payments to health-care providers that the governor's
plan calls for.
"Given the fact that most of these things
fall within the existing laws and rules, we hope that we'll ultimately
be successful in securing the funding," said Joe Munso, deputy
director of the California Health and Human Services Agency. "The
federal government is a key partner in any of these solutions."
However, Congress can change the underlying Medicaid
law to cut spending on the program -- and it might come under pressure
to do so, given that demands from California and other states are
likely to add to the federal deficit.
At the U.S. Health and Human Services Department,
an official said it was not as simple as California sending the
federal government a bill.
"Any change (Schwarzenegger) makes is essentially
a change in a contract," said the official, who asked not
to be identified because the review process had not yet begun and
the issue was considered sensitive. "No
change can be made to the original state plan without an agreement
from us."
Pressure from the states ultimately might force
Washington to act on health care. "We're not going to get
a national health plan until two or three big states get plans
of their own," said Rep. Pete Stark, D-Calif.,
chairman of the House Ways and Means health subcommittee. "Then
big companies are going to come to Congress and say, 'Look, let's
start to standardize this.' "
Back to Top
Rick Wartzman
Governor's Health Plan Could be Short-lived.
Los Angeles Times.
January 26, 2007
As one might expect from somebody who has been in and around politics
most of her life, Hillary Rodham Clinton launched her campaign
by leavening the optimism with a bit of caution.
"The debate will be a vigorous one," she said. "We want people
to become informed in order to rebut the kinds of attacks, the misinformation,
the advertising campaigns that will be stirred up in the next months."
Although they might well apply, these words were not part of Clinton's announcement
last week that she's running for president. They were uttered, instead, more
than 13 years ago, as the then-first lady and principal White House healthcare
advisor hit the road to sell her husband's proposal to revamp the country's medical-industrial
complex.
In the end, of course, her remarks turned out to be dead-on. Relentless condemnation,
a slew of half-truths and a multimillion-dollar ad blitz — much of it generated
by the business community — killed off HillaryCare, as the critics branded
it.
Now we have ArnoldCare, and it's hard not to be overwhelmed by a sense of deja
vu.
I wish it weren't so. It's obvious to just about everyone, even those with gold-plated
insurance policies, that we need to rein in medical costs. As for dealing with
the uninsured — 6.5 million in California, 47 million and growing across
the U.S. — I'd argue that coverage should be a basic right and would endorse
a national single-payer system. But clearly, that isn't going to happen anytime
soon. Politically, it's a nonstarter.
Yet so is the governor's plan. The reason is simple: Businesses big and small
will knife it, just as they did in D.C.
Some are more hopeful, calling attention to the warm reception Gov. Arnold Schwarzenegger's
plan has received from the Democratic side of the aisle. They cite positive feedback
from Safeway Inc. Chief Executive Steve Burd, among other executives. And they
say that corporations are more eager than ever to find a solution to the healthcare
crisis, pointing to a recent alliance on the issue between the Service Employees
International Union and the Business Roundtable, an association of leading CEOs.
But here's what many have forgotten: Business wasn't monolithic during the Clinton
days either. A number of companies, especially Big Steel and the automakers,
were on board. The Business Roundtable seemed so too — until it switched
positions and left the White House scrambling.
I had a ringside seat for all the action in 1993 and '94, following it closely
as a Washington-based journalist. And the central issue today is the same as
it was back then: Giving everyone coverage is hugely expensive — and nobody
wants to pay. As the late Louisiana Sen. Russell Long described the rap that
can be heard whenever revenue needs to be raised: "Don't tax you. Don't
tax me. Tax that feller behind the tree."
Schwarzenegger, for his part, isn't using the term "tax" at all, opting
instead for "fee" or the more oblique "coverage dividend." It's
not a trivial distinction; a tax would require a two-thirds vote of the Legislature
(and thus Republican support), rather than a simple majority.
But no matter which label is stuck on, the upshot remains: Insuring everybody
will entail reaching out and touching some of the most powerful and well-heeled
interests in the capital.
Under the governor's blueprint, which seeks to bring in $12 billion a year from
the public and private sectors, hospitals would be directed to relinquish 4%
of their revenue. Doctors would cough up 2%. Meantime, all businesses with 10
or more workers would have to offer health insurance to their employees or hand
over the equivalent of 4% of their payroll to the government to help furnish
coverage — a percentage that many (including me) believe should be at least
twice as high.
At this early stage, business groups are loath to look obstructionist. When I
was up in Sacramento last week, one lobbyist after another made sure to genuflect
toward the governor's office, praising Schwarzenegger for his bold vision. Everyone
agreed with his broad goals. But once they got past the platitudes, they poked
at his plan like a med student hovering over a cold cadaver.
For mom-and-pop enterprises, in particular, a mandate requiring that they offer
insurance or otherwise pay into the system is anathema — ideologically
as much as pragmatically.
"That would be very difficult … to move past," says Michael Shaw,
assistant state director for the National Federation of Independent Business,
which represents some 35,000 small firms in California. A recent court decision
in Maryland, Shaw notes with some glee, also throws doubt on the legality of
a mandate.
Even businesses already offering health insurance are trotting out pointed questions.
These companies should be delighted by the idea of universal coverage, given
that those who have insurance invariably wind up paying for those who don't.
This "cost-shifting" increased premiums in California an estimated
$1,186 per family last year. (Full disclosure: This calculation, embraced by
the governor, comes courtesy of the New America Foundation, the think tank where
I work. And, yes, for the record, New America does provide health insurance.)
But Allan Zaremberg, president of the California Chamber of Commerce, worries
that if medical inflation isn't corralled — and the governor's plan is
weak in this regard — there may be little choice but to try to tap businesses
again and again to keep the program running.
"Even if the money is adequate today, will it be enough to fund the program
five years from now?" he asks.
Insurers are also busy dissecting the Schwarzenegger proposal. Chris Ohman, president
of the California Assn. of Health Plans, suggests that a provision to treat everyone,
regardless of medical history, could cause the price of policies to soar for
the 1.7 million state residents who buy insurance on the open market. It could
also force insurers, faced with a less favorable set of economics, to pull out.
"We run the risk of having a perverse result," Ohman says.
I don't buy all of these doomsday scenarios. But I do trust what Shaw of the
independent business federation says is the bottom line: "No one wants to
be left holding the bill."
To be sure, the governor's plan is not all sticks. Doctors and hospitals, for
instance, would supposedly come out ahead because of higher Medi-Cal reimbursements
and fewer uninsured patients. The trouble is, such financial benefits tend to
be a bit fuzzy and off in the future. The pain, by contrast, is guaranteed and
immediate.
"There are some real positives," says Walter Zelman, a former California
insurance official and industry executive who helped craft the Clinton healthcare
initiative. "Yet everybody's initial reaction is, 'Where am I going to get
hurt?' "
Despite this, perhaps there is a way to move forward. Better political minds
than I might figure out how to target providers first, improving access to care
and holding the lid on costs. Then coverage could be expanded — perhaps
insuring all children to start, and moving on from there.
I hate to advocate an incremental approach to such a big problem. But to take
on all of these lobbies at once — physicians, hospitals, insurers, small
business and more — is to invite the same result that befell Clinton's
noble effort: It's a plan that'll end up wearing a toe tag.
Rick Wartzman is an Irvine senior fellow at the New America Foundation
Lynda Gledhill
California: Taxes—or Fees—in New
Health Plan Raise Critics' Ire
San Francisco Chronicle
January 22, 2007
Gov. Arnold Schwarzenegger has said he wants to work in a "post-partisan" manner
with Republicans and Democrats to achieve universal health, but
his plans may get hung up on an arcane argument about whether funding
for his proposal comes from new taxes or new fees.
A central component of Schwarzenegger's $12 billion program to provide health
insurance to all Californians are fees on employers, physicians and hospitals.
But Republicans and business groups argue that these are really taxes -- a key
distinction in California, where a tax requires approval by a two-thirds majority
in the Legislature, which means minority Republicans would need to go along.
A fee can be passed by a majority vote.
For Schwarzenegger, the need to bridge the partisan divide is critical if he
wants to achieve success, said Mark Baldassare, director of research for the
Public Policy Institute of California.
"Where he has gotten so much of his recent star power is in his ability
to work compromises with the Legislature," Baldassare said. "So I don't
think his popularity alone can carry the day. His popularity is derived from
working with both sides of the aisle to come to a compromise. That's what he's
going to have to do, or he will see his star power diminish."
Schwarzenegger campaigned on a promise not to raise taxes last year and blasted
his opponent, Phil Angelides, for wanting to raise taxes.
Baldassare said conservative Republicans may have a hard time forgiving the governor
if he continues to maintain that his proposals -- including a 4 percent payroll
tax on any employer of more than 10 people -- are indeed not taxes.
"This is going to be a very hard sell for the governor with Republicans
and conservative activists and members of the business community," Baldassare
said. "Democrats and pragmatic independents, they are able to adjust and
probably say the governor is now dealing with practical realities like expanding
health coverage, and so they are going to make an exception in this case."
Republican strategist Jon Fleischman, publisher of the popular Flashreport.org,
a conservative political Web site, echoed that Republicans are upset with the
governor.
"I and every Republican I know rallied behind this banner of no new taxes,
and it's now shredded by something that is a massive multibillion-dollar tax
that isn't considered a tax," he said. "It's insulting to everyone
with common sense."
In an interview with The Chronicle last week, Schwarzenegger brushed aside concerns
that he was imposing new fees on employers, doctors and hospitals, saying that
calling them new taxes is a matter of opinion.
Schwarzenegger insisted the new fees would be offset for employers by lower health
care costs and for doctors and hospitals by increased payments to them.
"We are all about putting money back out there and making it less expensive
to do business,'' he said.
Schwarzenegger has said he plans to campaign up and down the state to convince
voters and lawmakers that his plan is the right one.
Under California law, the difference between a fee and a tax comes down to where
the money goes, said Lenny Goldberg, executive director of the California Tax
Reform Association. Fees are either paid in exchange for a service or for mitigation.
For example, people pay fees at state parks in exchange for using a camping space,
or people pay fees on new tires to pay for the disposal of the old ones.
Taxes on the other hand, are used for general purposes.
"It's a distinction without a difference everywhere but California," he
said.
Conservative groups already are saying that they will not stand for an end-run
around the tax or fee issue.
"We argue that it is a tax and a very bad tax and counter to the representations
he made durin | 