Governor Unveils Health Care Reform Proposal
Gov. Arnold Schwarzenegger (R) on Monday announced a plan that would require all California residents to obtain health insurance coverage, regardless of immigration status, the Sacramento Bee reports. The plan would expand state programs and require contributions from employers, individuals, insurers, medical providers and the government (Benson/Rojas, Sacramento Bee, 1/9).
The plan would cost an estimated $12 billion (Geis/Lee, Washington Post, 1/9). Schwarzenegger said his plan will save $10 billion annually by reducing costs and redirecting state money already in the health care system (Kurtzman, AP/San Francisco Examiner, 1/9).
Funding for the proposal would include:
- Approximately $5.5 billion in additional federal funds to increase reimbursements for Medi-Cal, California's Medicaid program, and to reorganize public insurance programs (Shaw, Stockton Record, 1/9);
- $2 billion in funds paid to hospitals for treating uninsured patients (Robertson, Sacramento Business Journal, 1/8);
- Employer contributions estimated at $1 billion; and
- Contributions from physicians and hospitals that Schwarzenegger estimates will amount to $3.5 billion (Ainsworth, San Diego Union-Tribune, 1/9);
At least one million of the 6.5 million uninsured residents in California are undocumented immigrants, according to state officials (Steinhauer, New York Times, 1/9).
The governor's proposal would require all businesses with 10 or more employees to offer health insurance or contribute 4% of payroll to a state fund that would provide coverage to uninsured residents (Arnquist, San Luis Obispo Tribune, 1/9). The percentage would be based on employers' total Social Security wages (New York Times, 1/9).
Individuals who declined to carry insurance could face a reduction in state income tax refunds or have wages withheld (Washington Post, 1/9). The proposal calls for the state to expand Medi-Cal eligibility to adults who earn up to 100% above the federal poverty level, according to the New York Times (New York Times, 1/9).
The state will subsidize the estimated 1.2 million low-income state residents who do not qualify for coverage under Medi-Cal (Chorneau, San Francisco Chronicle, 1/9). The provision would allow them to purchase insurance through a state-run pool that will require a small contribution toward their premiums (AP/San Francisco Examiner, 1/9);
Individuals whose incomes exceed 250% of the federal poverty level would not be eligible for government subsidies but would nonetheless be required to obtain health insurance if it was not offered by their employer (Rau, Los Angeles Times, 1/9).
The plan would require insurers to:
- Provide coverage to all individuals, regardless of pre-existing medical conditions or age;
- Set premiums based only on age and location (Girion, Los Angeles Times, 1/9);
- Contribute at least 85% of their premium revenue to patient care (Harmon, Contra Costa Times, 1/8).
The governor's proposal would expand Medi-Cal eligibility to children, regardless of immigration status, from households whose annual incomes do not exceed 300% of the federal poverty level (New York Times, 1/9).
Schwarzenegger's plan would:
- Increase Medi-Cal reimbursements by $4 billion (Los Angeles Times, 1/9);
- Require physicians to pay 2% of their gross revenue to the state; and
- Mandate that hospitals pay 4% of revenue to the state (Herdt, Ventura County Star, 1/9).
The San Jose Business Journal reports that the plan would direct $10 billion to $15 billion in additional funds to hospitals and physicians annually (Roberts, San Jose Business Journal, 1/8).
Schwarzenegger's plan also would:
- Change the tax codes to make contributions to health savings accounts exempt from state income tax;
- Establish a "24-hour coverage" program that combines and coordinates the health care component of workers' compensation with traditional group health insurance;
- Provide rewards for healthy behavior, such as not smoking (Sacramento Business Journal, 1/8).