Health Reform Talks Snag Over Funding, Coverage Requirements

Gov. Arnold Schwarzenegger (R) on Wednesday said he would veto a health care reform bill by Democratic lawmakers if it relied only on employer contributions for financing, adding that he would consider pursuing a ballot initiative to overhaul health care if the negotiations in the Legislature fail, the Sacramento Bee reports.

AB 8 by Assembly Speaker Fabian Núñez (D-Los Angeles) and Senate President Pro Tempore Don Perata (D-Oakland) would expand health care coverage in large part by requiring employers to spend at least 7.5% of payroll on employee benefits (Yamamura, Sacramento Bee, 8/23).

Schwarzenegger said that the final health care reform plan "needs to have mandatory health care coverage, and it needs to have shared responsibility."

The governor's plan to expand coverage to all residents would be financed through mandatory contributions from employers, hospitals and physicians, as well as increased federal funds (Rau, Los Angeles Times, 8/23).

Steven Maviglio, spokesperson for Núñez, said, "When [Schwarzenegger] decides to roll up his sleeves and engage with the speaker and Sen. Perata, we are confident we can resolve the minor differences we have and complete comprehensive health care reform" (Kurtzman, AP/San Jose Mercury News, 8/23).

Anthony Wright, director of Health Access, said that by threatening to veto AB 8, Schwarzenegger is putting more pressure on himself to seek Republican support for his proposal, which some say would require a two-thirds majority approval because of provisions for hospital and physician contributions (Sacramento Bee, 8/23).

The Legislative Counsel's Office already determined that AB 8 would require only a simple majority vote in the Legislature because the employer contributions do not meet the constitutional definition of a tax (Herdt, Ventura County Star, 8/23).

Jan Emerson, spokesperson for the California Hospital Association, said hospital officials are negotiating with the governor but remain opposed to the mandatory contributions. Emerson said the increase in federal reimbursements that are a trade-off to the contributions would only benefit some hospitals, while the "many losers would be hospitals already on the financial edge."

Meanwhile, Dustin Corcoran of the California Medical Association said physicians oppose Schwarzenegger's mandatory contributions (Sacramento Bee, 8/23).

The governor at a rally in Sacramento on Wednesday told about 1,000 AARP members that he "can guarantee" that a compromise on health care reform will occur this year (Ventura County Star, 8/23).

Perata, however, said, "We should have been working on this every day this month," but lawmakers were "tied up with the budget stalemate." He added, "When we try to do things fast around here, we usually make mistakes that we regret."

Perata said he would push for a final proposal that does not require two-thirds majority approval (Chorneau, San Francisco Chronicle, 8/23).

The Senate leader also suggested that Schwarzenegger might have to call a special session after the legislative session ends Sept. 14 to finish negotiating a health care reform bill (Ventura County Star, 8/23).

Schwarzenegger, in response to Perata, said he would call such a session "if we need it." He added, however, "If everyone has the will, I think we can get it done" before the session ends (Myers, KQED, "Capitol Notes," 8/22).

The governor recently launched a Web site to encourage public dialogue on reforming California's health care system. On the Web site, www.FixOurHealthcare.ca.gov, users can:

• Share stories about health care;
• Learn about Schwarzenegger's reform plan;
• Contact elected officials to petition for an overhaul; and
• Read the latest news regarding health care reform (Office of the Governor release, 8/22).

Capital Public Radio's "KXJZ News" on Thursday reported on Schwarzenegger's speech at the AARP rally. The segment includes comment from Schwarzenegger and Perata (O'Mara, "KXJZ News," Capital Public Radio, 8/23). A transcript and audio of the segment are available online.

In addition, KCRW's "Which Way L.A.?" on Wednesday included a discussion with Tom Chorneau, a reporter for the San Francisco Chronicle, about Schwarzenegger's speech (Olney, "Which Way L.A.?," KCRW, 8/22). Audio of the complete program is available online.

Video of the governor's speech also is available on his Web site.