CALIFORNIA I: FEDS MAY ENFORCE KASSEBAUM-KENNEDY

      Due to "partisan gridlock" blocking the passage of the
 state's compliance measures for the Kassebaum-Kennedy insurance
 law, "federal officials are preparing to assume responsibility in
 California for enforcing key provisions," Los Angeles Times
 reports.  The "federal government should stay out of the state
 and let us resolve this issue," said Sean Walsh, Gov. Pete
 Wilson's (R) press secretary, noting that "the Wilson
 administration 'has already proposed legislation that covers most
 of the elements required in'" the law.  "Any outstanding issues,
 Walsh said, are expected 'to be resolved in the next legislative
 session,' which begins in January," reports the Times.  Walsh
 said if the federal government wants to alleviate the problem,
 "they should encourage fellow Democrats in the Legislature to
 deal solely with the issue at hand, and stop playing games and
 trying to load up an issue that has nothing to do with Kennedy-
 Kassebaum conformity."
      STALEMATE
      Democrats' proposals "would have gone far beyond the
 dictates of Kassebaum-Kennedy and made health insurance available
 to several million Californians who lack it."  The Democratic
 proposal would have expanded access to individual insurance
 policies even for people who had not previously had such coverage
 and would have capped the premiums at "20% above the average
 costs of such policies."  Wilson's more modest proposal "would
 have made individual insurance available only to people who had
 been insured for the previous 18 months and had exhausted their
 COBRA benefits."  Wilson's proposal "stated that the cost of an
 individual policy could not exceed the amount charged for
 policies offered through the state's high-risk program." 
 However, Times reports "that amount could still be two or more
 times as expensive as the cost of an average policy."
 Wilson's bill would only extend insurance to 10,000 or 20,000
 uninsured people, according to state Sen. Herschel Rosenthal (D). 
 "I'm looking for a compromise that can increase the numbers of
 people who would be covered," said Rosenthal, chair of the
 state's Senate Insurance Committee.  
      PROBLEMS
      As a result of the stalemate, "the U.S. Department of Health
 and Human Services says it will dispatch a team of officials to
 California soon to determine how to enforce the law from the
 agency's regional office in San Francisco."  Paul Olenick, chief
 of insurance standards at the Health Care Financing
 Administration, said, "In the past, the states have been very
 jealous of the prerogative to regulate insurance.  The federal
 government was supposed to be the deterrent in the background --
 effective because we never had to be used."  However, HCFA
 officials say it may be difficult to regulate "the insurance
 market in a state the size of California."  Further, HCFA will
 not be able to supply permanent staff in California because the
 Kassebaum-Kennedy law makes no provisions for this type of
 funding.  Clinton administration officials also say it would be
 better for Californians if the state handles the issue "because
 Washington has limited resources and is only authorized to
 enforce the federal law's minimum standards."  Times reports that
 California is one of only a handful of states that are not in
 compliance with the law (Rubin, 10/15).