Governor Considers Redirecting Funds To Expand Coverage
Gov. Arnold Schwarzenegger (R) on Monday is expected to call for redirecting up to $2 billion in state funds to purchase coverage for uninsured residents, according to sources familiar with the plan, the San Francisco Chronicle reports. The funds currently are allotted to hospitals to help cover the costs of treating uninsured patients.
Duane Dauner, president of the California Hospital Association, questioned the feasibility of the proposal. He said, "That money is covering actual costs being incurred -- that's money that's already been spent."
The governor's reform plan also might include a "provider tax" for hospitals, physicians, dentists and other care providers, according to the Chronicle.
Administration officials on Thursday confirmed that the governor will seek to require employers to offer accounts from which workers can use pretax dollars to pay for out-of-pocket health care costs (Chorneau/Gledhill, San Francisco Chronicle, 1/5).
The proposed mandate would allow employers to utilize Section 125, a federal tax break (AP/San Diego Union Tribune, 1/5). The mandate is aimed at smaller businesses and businesses that do not offer health insurance benefits.
The governor's office estimates that it would cost businesses about $200 to establish the accounts (Rau, Los Angeles Times, 1/5).
The state Franchise Tax Board estimates that the law would create $2.8 billion in federal income tax savings and $900 million in state savings for employers.
Ruth Liu, associate secretary for health policy in the Schwarzenegger administration, said requiring the accounts would lead to lower costs on subsidized care for the state, offsetting the loss of revenue to the state.
Officials on Thursday also confirmed a proposal by Schwarzenegger to reward individuals for utilizing preventive health programs, including:
- Breast cancer screenings;
- Diabetes management;
- Smoking cessation; and
- Weight reduction.
Administration officials on Wednesday confirmed that Schwarzenegger will propose a plan that will include provisions to extend coverage to all California children (California Healthline, 1/4).
Sen. Tom McClintock (R-Thousand Oaks) said Republican lawmakers will oppose a measure that would require taxpayer funds to cover children of undocumented immigrants, who would be included in the governor's proposal (Sheppard, Los Angeles Daily News, 1/4).
Summaries of a recent editorial and opinion piece addressing Schwarzenegger's expected health care reform proposals are provided below.
- Jamie Court, Judy Dugan, Los Angeles Times: The governor's reform proposals should include provisions aimed at the "biggest obstacle to insuring the uninsured: insurance companies," Court and Dugan write in a Times opinion piece. To ensure affordable and accessible health coverage, the governor and state lawmakers must require insurers to accept new rules that would require coverage of all applicants, regardless of pre-existing medical conditions; require all policies to include caps to out-of-pocket expenses; and require state residents to be given access to public officials' health coverage options, Court and Dugan write (Court/Dugan, Los Angeles Times, 1/5).
San Francisco Chronicle: The outcome of a recent Field Poll showing voter support for employer mandates provides Schwarzenegger and state lawmakers "a compelling reason to try again" and propose the measure, a Chronicle editorial states. With regard to the governor's proposal to extend coverage to all children, the "immigrant provision will be controversial," but "it makes sense in terms of public health to make sure all children are immunized and provided with basic preventative care," according to the editorial (San Francisco Chronicle, 1/5).
The governor's speech outlining his health care reform proposals will be Web cast live on Monday.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.