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Things Are Cooking in California

Things Are Cooking in California

June 29, 2007

We've been worried about health reform efforts in California -- the Olympics of state health reform. Seemed like the Governator and the Legislature we're moving further apart. Now the stage is being set for the high-stakes negotiations between both sides. Here are excerpts from a recent update from the Kaiser Daily Report:

California Senate President Pro Tempore Don Perata (D) and Assembly Speaker Fabian Núñez (D) on Thursday merged their health care proposals into a single bill that would require employers to contribute 7.5% of their payrolls to workers' health coverage... The proposal excludes a requirement that all state residents obtain health care insurance -- a "cornerstone" of Gov. Arnold Schwarzenegger's (R) health care proposal. Both chambers of the California Legislature earlier this month approved Democratic plans to overhaul the state health care system and provide coverage for more uninsured residents. Following the vote, Democratic lawmakers and a spokesperson for Schwarzenegger said that they will work during the summer to negotiate a compromise plan.

Schwarzenegger's plan would levy a 4% fee on businesses that do not provide health benefits to workers. His plan would raise additional funds through a 4% fee on hospitals' gross revenues and a 2% fee on doctors and increase provider rates paid by the state's Medicaid program. Under the Democrats' merged plan, a state-run insurance pool would be established for high-risk residents and funded by an assessment on health plans. The proposal also would provide premium subsidies to families and children with annual incomes less than 300% of the federal poverty level.

California's Managed Risk Medical Insurance Board would have the authority to adjust the employer fee to ensure fiscal solvency, according to the Sacramento Bee. Small businesses would not be exempt from contributing to workers' health coverage under the legislation (Rojas, Sacramento Bee, 6/22). Insurers would be required to sell policies to all state residents, "except those with the most serious medical conditions," according to the Times.

Núñez said, "I think our bill is pretty consistent with (the governor's) concept of shared responsibility," adding, "Everyone's got a role to play here. Everyone's got to tighten their belt". According to Núñez, "This gives us the entire summer to negotiate whatever aspects of the bill need to be negotiated with the governor and the opportunity to reach out to our Republican colleagues." However, Schwarzenegger said, "The only way that health care reform is going to work is if you have mandatory health care insurance." According to Assembly Republican leader Mike Villines, the new legislation will "devastate our state's small businesses." He added, "Rather than place the entire burden on California's small businesses, we should embrace common-sense reforms like those introduced by Assembly Republicans that will allow for more choice."

Meanwhile, some health care advocates are "becoming increasingly concerned that neither the governor's nor the Democrats' proposals will withstand legal challenge."

Stay tuned. This is the most important health access process in the nation right now. Check out the Health Access California blog for near daily updates.