California Gov. Schwarzenegger Vetoes Democrats' Health Care Overhaul Bill

Main Category: Health Insurance / Medical Insurance
Article Date: 16 Oct 2007 - 6:00 PDT

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California Gov. Arnold Schwarzenegger (R) on Friday vetoed a health care overhaul measure (AB 8) proposed by legislative Democrats, the Los Angeles Times reports (McGreevy, Los Angeles Times, 10/13). The legislation would have expanded health insurance to about four million of the more than 6.5 million state residents who lack coverage. Employers would have been required to contribute as much as 7.5% of their payroll to cover the cost of health insurance for employees or pay into a state pool that would provide coverage. The legislation would have not required all state residents to obtain health insurance (Kaiser Daily Health Policy Report, 9/24).

In vetoing the measure, Schwarzenegger said, "This bill does not achieve coverage for all -- a critical step needed to reduce health care costs for everyone." He added that the bill "places an unreasonable financial burden on businesses" (Los Angeles Times, 10/13). In a statement, the governor said, "The time is now for all of us to return to the negotiating table, find middle ground and pass the comprehensive reforms we need to fix our broken health care system."

State Assembly Speaker Fabian Núñez (D) in a statement said, "This veto not withstanding, where we end up on health care will look a lot like AB 8 -- particularly on affordability, fair participation from employers and keeping the costs of prescription drugs down." According to the Sacramento Bee, "More than a month into a special legislative session on health care, the two sides remain divided on how to pay for health care expansion as well as other important issues" (Rojas, Sacramento Bee, 10/13).

Lottery Proposal
In related news, the New York Times on Sunday examined how "government officials in at least a dozen states are considering lottery privatizations -- what would collectively amount to the biggest privatization of a government enterprise in American history" -- to fund various initiatives (Schwartz/Nixon, New York Times, 10/14). Schwarzenegger last week introduced a revised $14 billion proposal to require all state residents to obtain health insurance, financed in large part by leasing the California lottery to a private firm (Kaiser Daily Health Policy Report, 10/10).

According to Jean Ross, executive director of the California Budget Project, leasing the lottery would provide "a one-time infusion of cash when we have an ongoing budget shortfall." Ross said, "You can only sell an asset once." Critics maintain that "future growth in lottery revenue, fed by private operators funneling resources into increased marketing and sales outlets, is likely to come from minority and low-income gamblers who already form a disproportionate share of those who play," the New York Times reports.

However, Schwarzenegger in announcing the proposal said, "I think there is so much potential there," adding, "We have gotten numbers all the way up to $37 billion. So I think the question really is, should we not really start thinking creatively here?" (New York Times, 10/14).

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.

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