Kuehl Says Single-Payer Bill Independent of Federal Funds

Sen. Sheila Kuehl (D-Los Angeles) says Gov. Arnold Schwarzenegger's (R) health care reform proposal faces an uphill battle because of its reliance on federal money at a time when there is limited support among federal officials for increasing health care funding to states, Capitol Weekly reports.

Kuehl on Tuesday reintroduced legislation (SB 840) that would create a single-payer, state-run health care system in California. The proposal would not require federal funding.

The bill does not provide a funding mechanism, but instead it would establish a commission of stakeholders in the health care industry to develop a mechanism to pay for universal coverage.

A 2005 study of Kuehl's proposal by the Lewin Group found that the cost would not require state or federal funding if it instituted a new 8% payroll tax on employers and a 4% income tax on individuals (York, Capitol Weekly, 3/1).

Under the governor's plan, Medi-Cal and Healthy Families would be expanded to help provide coverage to low- and moderate-income state residents, and individuals who declined to carry insurance could face a reduction in state income tax refunds or have wages withheld.

The $12 billion plan relies on mandatory contributions from employers, individuals, insurers and medical providers. The plan also relies on $5.74 billion annually from a range of federal programs, including $3.7 billion in new federal funding.

Schwarzenegger this week met with HHS Secretary Mike Leavitt to discuss federal funding for his proposal. The governor told Leavitt that he opposes President Bush's proposed cuts to Medicare, Medicaid and SCHIP because such costs would make it difficult for California to expand health coverage. Schwarzenegger also sent a letter to President Bush stating his opposition to the funding cuts (California Healthline, 2/28).

Adam Mendelsohn, director of communications for the governor, said, "There are all sorts of things we can do to maximize federal dollars for health care." He added, "That has to be a part of any health care reform."

Kim Belshé, secretary of the Health and Human Services Agency, said that the governor's plan would raise an additional $3.4 billion in federal funds but added that she is concerned about Bush's proposed funding cuts (Capitol Weekly, 3/1).

Jot Condie, president of the California Restaurant Association, shared his thoughts on recent health care proposals in California in an interview with Capitol Weekly.

"It's not that restaurants or restaurateurs don't want to offer health care to their employees," Condie said. "It's that they can't. That's rooted in the thin profit margins, and in the double-digit increases in premiums that have gone unabated for years," Condie said.

"What Senator Kuehl is proposing, I don't know if it's better" than other proposals requiring contributions, he said. "But we think that if you were to figure out a way to address this societal issue and have everyone in California pay for that burden, that's probably a better way to go than to disproportionately impact doctors, hospitals and employers" (Garvin, Capitol Weekly, 3/1).

"One big cost challenge" to Kuehl's proposal "would be the system's reliance on fee-for-service medicine, in which doctors would provide whatever care they deemed appropriate and then bill the state," Daniel Weintraub writes in his Sacramento Bee column. Under Kuehl's system, "it would be difficult to prevent physicians from providing more care to maintain their incomes," he writes.

"Kuehl said the new program would have a strong anti-fraud enforcement unit, but, ultimately, it would leave broad discretion in the hands of physicians," according to Weintraub (Weintraub, Sacramento Bee, 3/1).

KQED's "The California Report" on Wednesday reported on Kuehl's legislation. The segment includes comments from Kuehl (Varney, "The California Report," KQED, 2/28).

Audio of the segment is available online.