Health Insurance Proposal Based on Massachusetts Law

A proposal announced on Monday by California Gov. Arnold Schwarzenegger (R) that would require all state residents to obtain health insurance "draws heavily on Massachusetts' health care law in both philosophy and details," according to lawmakers and policy advocates, the Boston Globe reports.

According to the Globe, several people who developed the Massachusetts law recently discussed the legislation with lawmakers and business groups in California, and their comments are "reflected in Schwarzenegger's proposal," with similarities that "extend beyond general policy to some of the plans' details."

Michael Widmer, president of the Massachusetts Taxpayers Foundation, said, "Until Massachusetts passed its law, the common wisdom was that no state could do this alone. Now, everywhere our traveling troupe goes, the mantra is that if Massachusetts can do it, so can we."

Assembly member Hector De La Torre (D) said, "We looked seriously at the Massachusetts effort and wanted to see what was applicable to California."

Some Differences

However, "there are some striking differences between California and Massachusetts" that will make the implementation of the California proposal more difficult, the Globe reports.

One in five Californians is uninsured compared to 7.2% in Massachusetts, according to the Globe. As a result, the California proposal would cost substantially more than Massachusetts law.

Massachusetts also "had a funding advantage" because the state had established an annual pool of more than $500 million to compensate hospitals for no-cost care provided to uninsured residents prior to the implementation of the law, funds that went a "long way toward paying for free and subsidized care to newly insured residents," the Globe reports.

Jonathan Gruber of the Massachusetts Institute of Technology, who provided analytic support to the California and Massachusetts efforts, said, "They have the same health coverage goodies we do but more costs and more opponents. It will be quite a struggle" (Krasner, Boston Globe, 1/11).

Small Business Opposition

Gov. Schwarzenegger's health reform proposal is concerning small-business owners who disagree with the provision to require a 4% payroll contribution for employers with more than 10 workers that do not offer health coverage, the San Diego Union-Tribune reports.

Stephen Zolezzi, spokesperson for the Food & Beverage Association of San Diego County, said the provision will have a particularly strong effect on restaurants. He said many restaurants do not provide employee health benefits because of the:

Cost of benefits;
Number of part-time employees; and
High employee turnover rate.

Michael Shaw, assistant state director of the National Federation of Independent Business, said the payroll contributions could put many small employers out of business because many operate on low profit margins.

Scott Alevy, vice president of policy and communications at the San Diego Regional Chamber of Commerce, said, "One of the positives about the governor's plan is that it really spreads the pain around." He added, "It certainly appears to be holding all stakeholders responsible for resolving what is indisputably a crisis in this country" (Bigelow, San Diego Union-Tribune, 1/11).

Editorial

Schwarzenegger's health reform proposal will bring "considerable debate" in the coming weeks and months, "[b]ut at least there will be real debate," a Contra Costa Times editorial states. "We hope that the debate will proceed in an intelligent manner with the focus on expanding health care coverage in an affordable and efficient manner that shares the costs equitably" (Contra Costa Times, 1/11).

Broadcast Coverage

Several broadcast programs reported on the California proposal:

APM's "Marketplace": The segment includes an interview with "Marketplace" economics correspondent Chris Farrell (Jagow, "Marketplace," APM, 1/11). Audio of the segment is available online.
NPR's "All Things Considered": The program includes comments from Kate Bisego of Health Care for All and John Kingsdale, executive director of the Massachusetts Commonwealth Connector (Knox, "All Things Considered," NPR, 1/11). Audio of the segment is available online.
NPR's "Morning Edition": The program includes comments from Michael Miller, director of Community Catalyst (Inskeep, "Morning Edition," NPR, 1/11). Audio of the segment is available online.
NPR's "Talk of the Nation": The program includes a discussion with Mark Smith, president and CEO of the California HealthCare Foundation; Stuart Altman, director of the Schneider Institutes for Health Policy at Brandeis University; and NPR science desk correspondent Joanne Silberner (Conan, "Talk of the Nation," NPR, 1/11). Audio of the segment is available online.

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.