State Senate Committee To Consider California Health Care Proposal As Newly Released Report Assesses Plan's Finances

Main Category: Health Insurance / Medical Insurance
Article Date: 24 Jan 2008 - 6:00 PDT

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Depending on alternative financial scenarios, compromise health care legislation (ABX1 1) negotiated by California Gov. Arnold Schwarzenegger (R) and state Assembly Speaker Fabian Nunez (D) could be adequately financed, or it could result in a $4 billion budget shortfall within five years, according to a report released Tuesday by the state Legislative Analyst's Office, the Sacramento Bee reports.

The report by Legislative Analyst Elizabeth Hill was requested by state Senate President Pro Tempore Don Perata (D), who delayed a vote on the plan until its impact on California's projected $14.5 billion state budget deficit was analyzed (Rojas, Sacramento Bee, 1/23). The state Assembly approved the measure last month (Kaiser Daily Health Policy Report, 12/28/07). Schwarzenegger, Nunez and other supporters of the bill say that the proposed $14 billion plan would not affect the state budget (Sacramento Bee, 1/23).

Hill said the state's estimated cost for subsidizing health care coverage is based on monthly premiums of $250 per person. If the actual cost is closer to $300, there could be a $1.5 billion shortfall within five years.

According to the San Francisco Chronicle, the report also found that:

• Annual costs of the $14 billion overhaul would increase by $300 million by the program's fifth year, and by $1 billion after 2015, if the increase in health care costs has been underestimated by as little as 0.5% annually;
  
  
• $1 billion in federal funding for the program is uncertain; and
  
  
• The number of uninsured California residents is likely to increase in the coming months if the economy slows down, increasing costs.

The report is available online.

Senate Health Committee To Hear Bill
The report was released on the eve of a scheduled hearing on the health care overhaul measure by the state Senate Health Committee (Chorneau, San Francisco Chronicle, 1/23). The Health Committee has 11 members and needs six votes for the legislation to pass. Five members are Republican, and "all but one," state Sen. Abel Maldonado, "are sure to vote against the bill," the Los Angeles Times reports. Democratic state Sen. Sheila Kuehl, chair of the committee, has said she will not support the measure, and another committee member, state Sen. Leland Yee (D), announced on Tuesday that he will vote against the plan (Rau, Los Angeles Times, 1/23).

In announcing his opposition, Yee said, "Californians should be extremely skeptical of a law which requires them to purchase insurance but allows insurance companies to charge any amount for the policy." He added that the plan "is not a step in the right direction but a huge jump backwards for California's working families without insurance" (Lawrence, AP/Los Angeles Daily News, 1/22).

Sources close to Perata said he wants the state Senate to pass the bill and is considering adding several new members to Wednesday's committee hearing to create a majority in favor of the measure, according to the Times. The Senate leader also could use other incentives to pressure lawmakers to change their votes, the Times reports (Los Angeles Times, 1/23).

On Wednesday, the Times featured a Q&A with Kuehl. In the interview, she said the compromise health care reform bill "should stand or fail on its own," without any amendments by the state Senate Health Committee. "This bill has a long road to go," Kuehl said (Los Angeles Times, 1/23).

Reprinted with kind 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.