Hurdles Remain for Compromise on California Health Care Reform

If Gov. Arnold Schwarzenegger (R) and Democratic legislative leaders reach a deal on health care reform this year, the plan must overcome efforts by interest groups and fellow lawmakers to derail any agreement, the Sacramento Bee reports (Yamamura, Sacramento Bee, 11/26).

Last week, Assembly Speaker Fabian Núñez (D-Los Angeles) postponed a vote in the Assembly on the Democrats' health care reform plan (ABX1 1). Núñez and Senate President Pro Tempore Don Perata (D-Oakland) are carrying the measure.

The Assembly vote was originally scheduled for Nov. 26 but now is expected to take place on either Dec. 5 or Dec. 6.

Núñez postponed the vote to continue negotiating a compromise on health care reform with Schwarzenegger.

Earlier this month, the Assembly Health Committee approved the Democrats' plan, which more closely resembles the governor's health care plan than an earlier Democratic proposal did. However, differences remain over employer contributions, how to finance the proposed coverage expansion and other issues.

The Democrats favor a tobacco tax increase of $2 per pack, while Schwarzenegger has proposed leasing the state lottery to a private operator.

The funding mechanism would be packaged as a ballot initiative that would go before voters in the November 2008 election (California Healthline, 11/21).

The proposed tobacco tax increase likely would prompt an opposition campaign from the tobacco tax industry, which spent more than $65 million last year to defeat an increase of $2.60 per pack to fund health services.

Tobacco companies recently shelled out $12 million to defeat an 85-cent increase in Oregon.

Meanwhile, pharmaceutical companies take issue with the Democrats' proposal to allow the state to seek bulk purchasing agreements on prescription drugs. The pharmaceutical industry also has a history of funding opposition campaigns in California (Sacramento Bee, 11/26).

Assembly Minority Leader Mike Villines (R-Clovis) has hinted that a ballot referendum in June 2008 could overturn any deal on health care reform.

Deborah Gonzalez, chief consultant to the Republican caucus, said tobacco companies, pharmaceutical firms and other businesses could potentially fund a referendum on the ballot (California Healthline, 11/14).

The timing of the referendum could prove costly because Democratic voters are least likely to vote in June, according to the Bee.

Meanwhile, Garry South, a Democratic strategist and former adviser to Gov. Gray Davis (D), said it could be difficult winning support for a financing mechanism from voters, the majority of whom have health insurance.

South noted that many voters are wary that a health care expansion could jeopardize their existing health insurance benefits or force them to pay more for coverage (Sacramento Bee, 11/26).

Meanwhile, public hospitals in California are worried about a possible funding shortfall if the current version of the Democrats' health plan is enacted, the San Francisco Chronicle reports.

Under the plan, public hospitals and county health care systems would lose about $1 billion annually in state funding that is now used to cover the cost of treating uninsured patients. The funding loss would come because the plan aims to provide health insurance coverage to all residents.

Public and private hospitals also would pay a new tax, but it would be offset by higher reimbursement rates for patients enrolled in public health insurance programs.

However, Wright Lassiter, CEO of Alameda County Medical Center, argues that increasing state reimbursements could cause public hospitals to lose federal funding because they currently receive money from a variety of state and federal sources.

Sabrina Lockhart, spokesperson for Schwarzenegger, maintains that the governor expects public hospitals to do as well or better than private hospitals under the current proposal (Chorneau, San Francisco Chronicle, 11/26).

Schwarzenegger and lawmakers must be prepared to provide subsidies for purchasing health insurance in order to guarantee affordable health care coverage under a mandate on health care coverage, the AP/San Francisco Examiner reports.

Unions in California, concerned over the mandate, have petitioned Democrats to expand subsidies for health insurance.

Marian Mulkey, an analyst with the California HealthCare Foundation, said, "If you really are going to make insurance affordable for all of the Californians who are uninsured, given these demographics, it's an expensive proposition" (Kurtzman, AP/San Francisco Examiner, 11/25).

Summaries of editorials regarding health care reform in California appear below.

• Los Angeles Daily News: "It will be up to the Democrats and the governor to make sure they iron out any last-minute differences and make good on the promise of reforming health care in 2007," a Daily News editorial states. "They need to make a deal now, or lose what little trust they have left among hard-working families trying to make ends meet," according to the editorial (Los Angeles Daily News, 11/23).
• San Jose Mercury News: If "voters reject a comprehensive [health care] reform package, it ... likely means that by 2009, more than one million California children will have no coverage," a Mercury News editorial states. "California should not wait another day to begin providing health care insurance to all of its children," the editorial states (San Jose Mercury News, 11/26).

Capital Public Radio's "KXJZ News" on Monday reported on the postponed votes and other developments in health care reform. The segment includes comments from:

• Sherry Bebitch-Jeffe, a political analyst and senior scholar at USC; and
• Núñez spokesperson Steve Maviglio (O'Mara, "KXJZ News," Capital Public Radio, 11/26).