Governor, Democrats Likely To Compromise on Reform Plan
Gov. Arnold Schwarzenegger (R) continues to promote his proposal to overhaul California's health care system, but a compromise plan with Democratic lawmakers is more likely as summer negotiations draw closer, the Wall Street Journal reports.
Unveiled in January, the governor's plan would require all California residents to obtain health care coverage. Insurers would be required to provide coverage to all applicants, regardless of pre-existing medical conditions.
Businesses with at least 10 workers would have to either provide coverage or contribute 4% of payroll into a state fund. Physicians and hospitals also would be required to contribute to the cost of the plan.
The proposal also would seek more federal matching funds by expanding federal health care programs in California.
Schwarzenegger contends that his proposed individual mandate would eliminate a "hidden tax" that insured residents are paying to subsidize treatment costs for the uninsured.
While the governor rallies support for his overhaul plan, legislative committees continue to move forward a plan by Assembly Speaker Fabian Núñez (D-Los Angeles) and Senate President Pro Tempore Don Perata (D-Oakland).
A key difference between both plans is that the Democrats oppose an individual mandate.
Núñez said, "It's irresponsible to require people to purchase health care insurance when you can't guarantee that there's an affordable health care product for them to purchase."
Labor unions and consumer groups also oppose the individual mandate, arguing that working-class residents could not afford coverage.
The Journal reports that, "Despite the wrangling, there's still a decent chance that the Democrats and Schwarzenegger will agree on a major overhaul."
Núñez said, "I'm not close-minded to anything."
Perata added, "If something lands on [Schwarzenegger's] desk, how do you explain not signing it?"
Republican lawmakers oppose both the Democrats' plan and Schwarzenegger's, alleging that they assess a new tax on businesses through mandatory contributions. Republican lawmakers said they will vote against any proposal that includes mandatory contributions.
However, the Democrats have crafted their bill to prevent anything being ruled a new tax, and any final agreement likely will not include a requirement for physicians and hospitals to share the cost of expanding coverage, according to the Journal.
Blue Cross of California, the state's largest insurer and a leading critic of the governor's plan, warns that premiums will rise for affordable coverage if insurers are forced to provide coverage to everyone.
Business groups are considering a lawsuit challenging any taxes in the final legislation. Another suit, meanwhile, could challenge that the final plan violates a 1974 federal law that limits states' authority to regulate health care coverage for employers.
Opponents also could seek to repeal legislation through a ballot initiative, similar to a voter referendum in 2004 that repealed a law intended to expand health insurance coverage. Schwarzenegger campaigned in favor of repealing that law, arguing that it would be costly for employers (Wilde Mathews/Rundle, Wall Street Journal, 7/17).