Governor’s Reform Proposal Faces Criticism
Gov. Arnold Schwarzenegger's (R) proposal to reform the health care system has sparked debate among lawmakers, business leaders and medical providers over whether the plan is assessing a "tax" to raise funds or a "fee," the Sacramento Bee reports.
A "fee" requires a majority vote and would have a less difficult time passing in the Legislature. Republicans are unlikely to support the proposal and could block its passage if the requirement is a two-thirds majority vote -- the threshold for enacting new taxes (Rojas, Sacramento Bee, 1/9).
However, if the legislation defines the funding as a "fee" rather than a "tax," the issue is likely to be resolved in court, according to the Los Angeles Times (Nicholas/Halper, Los Angeles Times, 1/9).
Administration officials say the governor is maintaining his campaign pledge not to raise taxes because the mandatory contributions from employers and medical providers will be reused to pay for health coverage.
According to state law, a tax is imposed for revenue purposes, not a specific benefit (Sacramento Bee, 1/9).
Business leaders criticized the mandate in Schwarzenegger's plan that employers with more than 10 workers either must provide coverage or contribute 4% of payroll into a state fund in which workers would be required to purchase coverage.
Michael Shaw -- assistant state director of the National Federation of Independent Businesses -- said the 4% mandate "is not going to go toward other things such as growing the business." Shaw also said that the proposal would require more spending from small businesses to set up pretax health care accounts for employees to pay premiums (Lifsher, Los Angeles Times, 1/9).
John Coupal, president of the Howard Jarvis Taxpayer Association, said that the plan must be labeled a "tax increase" to ensure that it will require a two-thirds vote in the Legislature
Dustin Corcoran, a lobbyist for the California Medical Association, said that there is a 20% probability that Schwarzenegger's proposal will pass without revision, because of competing plans by Democratic lawmakers (Harmon, MediaNews/Contra Costa Times, 1/9).
Art Pulaski, executive secretary-treasurer of the California Labor Federation, said the proposal is "a boon to insurance companies, but a bust for most workers" (Colliver, San Francisco Chronicle, 1/9).
Sen. Sheila Kuehl (D-Los Angeles), chair of the Senate Health Committee, said she is concerned that there is no limit on individual contributions toward coverage. However, Kuehl also said she supported the contribution requirements for hospitals and physicians. Those payments would be directed into a state fund that provides coverage for individuals ineligible for Medi-Cal (MediaNews/Contra Costa Times, 1/9).
Assembly Minority Leader Michael Villines (R-Clovis) said, "If we put any form of mandate on a business, we are seeing a jobs tax" (Rau, Los Angeles Times, 1/9).
Assembly Speaker Fabian Núñez (D-Los Angeles), who in December 2006 released his own health care reform plan, said, "On its face, [the plan] is a good start" (Carlton, Wall Street Journal, 1/9). Núñez also said that the plan is likely to be "a simple-majority vote bill or series of bills" that will not require the two-thirds majority vote.
Dr. Anmol Mahal, president of the governing body of the California Medical Association, said the mandatory contributions for physicians and hospitals are an "inappropriate way to bring money into the system" because it will "end up taxing the sick" (Sacramento Bee, 1/9).
Jan Emerson, spokesperson for the California Hospital Association, said, "What we don't understand is the impact of (the 4% fee) versus the additional money that we'll get from increases in Medi-Cal reimbursements" (San Francisco Chronicle, 1/9). Emerson said the organization will make its own conclusions regarding the terminology of the contributions as a "fee" or a "tax" (Sacramento Bee, 1/9).
Summaries of editorials reacting to the governor's health care reform proposal appear below.
Los Angeles Times: "The governor certainly knows that the final version of the plan will deviate from the proposal he unveiled on Monday," a Times editorial states, adding that "only time, and plenty of intense horse trading, will tell" what the final details of the plan will be (Los Angeles Times, 1/9).
Orange County Register: Schwarzenegger's proposal "piles on more of what created the health care mess in the first place: government mandates, government-imposed costs and government regulations," a Register editorial states, adding that "the governor's good intentions take us farther down the road of concession, not merely compromise" (Orange County Register, 1/9).
San Diego Union-Tribune: The governor's proposal "evades the central problem -- the rising costs and poor quality of health care," according to a Union-Tribune editorial. "The governor has crafted a government-heavy plan, perhaps to win support from the Democrats," the editorial states, concluding, "He can salvage universal coverage by putting consumers in charge" (San Diego Union-Tribune, 1/9).
San Francisco Chronicle: Schwarzenegger's proposal involves "a complicated system of tradeoffs, higher fees and tougher rules," a Chronicle editorial states. "There are plenty of barriers to achieving universal health care, and money is the object in each," the Chronicle states, adding, "Any attempt to mandate coverage must be accompanied by meaningful steps to contain costs" (San Francisco Chronicle, 1/9).
San Jose Mercury News: The governor "unveiled a bold, comprehensive health care reform plan that shows he's ready to tackle the issue by emphasizing a welcome concept: shared responsibility," according to a Mercury News editorial. Schwarzenegger "exceeded expectations by focusing on the basic principle that every Californian must be insured" (San Jose Mercury News, 1/9).
Columnists, legislators and other commentators have authored opinion pieces on the health care proposal. Summaries appear below.
- Sen. Sheila Kuehl (D-Los Angeles), Los Angeles Times: Proposals by Assembly Speaker Fabian Nuñez (D-Los Angeles), Senate President Pro Tempore Don Perata (D-Oakland) and the governor "are short-term solutions that have the potential to expand coverage but at the end of the day can't be relied on to achieve ... a government guarantee of access to affordable health care coverage in the state," Kuehl, chair of the Senate Health Committee, writes in a Times opinion piece. According to Kuehl, the bill (SB 840) "is the only proposal that establishes universal, affordable, comprehensive health insurance for all Californians and guarantees the right of each patient to choose his or her doctor" (Kuehl, Los Angeles Times, 1/9).
- Dan Walters, Sacramento Bee: "The overarching uncertainty" about the governor's proposal "is whether such an ambitious scheme could survive the legislative grinder," columnist Walters writes in a Bee opinion piece. He writes, "There are four possibilities: effectively reforming health care; enacting a minor, face-saving expansion of care; another gridlock failure; or creating another unworkable monstrosity" (Walters, Sacramento Bee, 1/9).
- Debra Saunders, San Francisco Chronicle: "Schwarzenegger deserves praise for attempting to tackle the thorny and thankless task" of reforming the health care system in California, but he "was wrong" in calling for health insurance coverage for undocumented immigrants, columnist Saunders writes in a Chronicle opinion piece. According to Saunders, "the unintended consequences" of such a plan "could cost billions, and the state already is running in the red" (Saunders, San Francisco Chronicle, 1/9).
- Diane Ernst, San Francisco Examiner: "Californians should not be fooled by schemes to cure health care woes with bigger government," Ernst, a public policy fellow in health care studies at the Pacific Research Institute, writes in an Examiner opinion piece. Ernst calls for reducing government regulations on insurers and hospitals, and encouraging adoption of health savings accounts and use of retail clinics. She writes that the governor and the Legislature "should lift burdensome government regulations and allow market incentives to work in the Golden State" (Ernst, San Francisco Examiner, 1/9).
NPR's "Morning Edition" on Tuesday reported on the proposal. The segment includes comments from:
- Kim Belshé, secretary of the Health and Human Services Agency
- Joel Fox of the Small Business Action Committee;
- Len Nichols, an economist at the New America Foundation; and
- Schwarzenegger (Neighmond, "Morning Edition," NPR, 1/9).