Potential California Health Care Agreement Could Spur Health Care Overhaul Debate

Main Category: HIV / AIDS
Article Date: 29 Aug 2007 - 2:00 PDT

email to a friend   printer friendly   view / write opinions   rate article

The "adoption of a comprehensive plan to overhaul health care in a big, politically influential state" such as California "probably would spur similar efforts around the country and increase pressure on presidential candidates to tackle the issue," the Washington Post reports. California Gov. Arnold Schwarzenegger (R) "still has nothing to show for the grand" health care proposal he announced in January, but the focus "is turning back to health care" after lawmakers last week reached an agreement on a state budget, according to the Post. The Post reports that successful efforts to pass health care legislation in California also could influence Congress next month as it resumes the debate over expanding SCHIP (Lee, Washington Post, 8/26).

Both chambers of the California Legislature in June approved Democratic plans to overhaul the state health care system and provide coverage for more uninsured residents. The bill (AB 8) would require employers to contribute 7.5% of their payrolls to workers' health coverage but would not require all state residents to obtain health insurance -- a key component of Schwarzenegger's health care proposal.

Schwarzenegger's plan for reform 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, would and increase provider rates paid by Medi-Cal, the state's Medicaid program (Kaiser Daily Health Policy Report, 6/25). Schwarzenegger last week threatened to veto the Democrats' legislation.

Prospects
Drew Altman, president and CEO of the Kaiser Family Foundation, said, "If a breakthrough could occur in California, it would really be an earthquake in terms of health reform," adding, "A lot turns on whether it succeeds or fails." Altman continued, "Candidates will look at that when they decide how hard to push this. The Congress in 2009 will look at it. It will affect the whole psychology of the health reform movement that's building." However, analysts say reaching an agreement on health care will be difficult.

The Post notes that in Massachusetts, which implemented its health insurance law in July, "business groups, consumer advocates and politicians worked together to craft the new law, a sharp contrast to the fractious atmosphere in California." In addition, it is uncertain whether the Bush administration would allow the state to expand its version of SCHIP.

Marian Mulkey, senior program officer with the California HealthCare Foundation, said about efforts to pass reform legislation in California, "What's going to happen next? I really think it's anybody's guess," adding, "The next few weeks will be critical" (Washington Post, 8/26).

Budget
California lawmakers on Friday completed a state budget, and now the "biggest agenda item" for California lawmakers and Schwarzenegger is passing health care reform legislation, "an issue that political leaders from both parties have called one of their top priorities this year," the San Francisco Chronicle reports. The $145 billion budget was 56 days overdue.

Schwarzenegger used line-item vetoes to cut $703 million from the budget before signing it on Friday, according to the Chronicle. The cuts included $527 million from health and human services programs, including $330 million from Medi-Cal and $55 million from a program that provides services to homeless adults with mental illnesses. The governor also cut $9.8 million from an outreach program to enroll children in state health insurance programs and $6.3 million from the state's prescription drug benefit that allows certain families to purchase discounted drugs.

The budget preserves $38 billion in health and human services spending. Cuts to the budget increase the state's surplus to $4.1 billion, according to the Chronicle (Yi, San Francisco Chronicle, 8/25).

"Reprinted with permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.