Hospitals Welcome Clarification of Governor’s Health Proposal
California Hospital Association officials said a provision in Gov. Arnold Schwarzenegger's (R) health care reform proposal to require a 4% contribution from hospitals' gross revenue was intended to be based on hospitals' operating revenue, the San Francisco Business Times reports.
CHA President Duane Dauner said the provision was "a typographical error, that is not what they meant."
A mandatory contribution based on operating revenue for CHA members would cost $2.3 billion, compared with $10 billion if the contribution were based on gross revenue, according to CHA officials. Hospitals define operating revenue as actual reimbursements from Medicare, Medi-Cal and other payers, rather than the nominal price of hospital services.
Sabrina Lockhart, Schwarzenegger's deputy press secretary, said the governor's proposal used a different term but intended the contribution to come from operating revenue (Rauber, San Francisco Business Times, 2/5).
The Schwarzenegger administration is determining what "affordable" coverage outlined in his health care reform proposal would entail, the San Jose Mercury News reports. Prescription drugs likely would be included in all plans but vision and dental coverage would not, according to the Mercury News.
Employers and health plans would be required to provide affordable coverage, but there are few benchmarks for determining the percentage of income that is expected for an individual to spend on health insurance, the Mercury News reports.
Officials based poverty level guidelines in the governor's proposal on research showing U.S. workers' total income and what they pay for employer-sponsored coverage and out-of-pocket coverage, according to the Mercury News (Feder Ostrov, San Jose Mercury News, 2/5).
Schwarzenegger's plan "step[s] away from the 65-year-old pattern of tying health insurance to the place of employment, a historical oddity now visibly failing in this far more mobile society," David Broder writes in his Washington Post column. A "major barrier" to the plan's provisions is "the feature of the federal tax code that subsidizes job-based health insurance by making its cost deductible to the business and tax-free to the employee," Broder writes (Broder, Washington Post, 2/4).
The governor on Saturday in his weekly radio address discussed health care reform. The speech 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.