Legislative Democrats Merge Health Care Reform Proposals
Assembly Speaker Fabian Núñez (D-Los Angeles) and Senate President Pro Tempore Don Perata (D-Oakland) on Thursday announced that they had merged their separate health care reform proposals into a single compromise bill, the Sacramento Bee reports.
Perata and Núñez said the move will serve as a baseline for negotiations with Gov. Arnold Schwarzenegger (R), who has offered his own plan to overhaul the state's health care system (Rojas, Sacramento Bee, 6/22). No lawmaker has agreed to carry Schwarzenegger's proposal as legislation (AP/Orange County Register, 6/22).
The compromise legislation -- moving through the Legislature as AB 8, which Núñez introduced -- would:
- Require employers to provide health insurance benefits or pay 7.5% of payroll to a state fund to provide coverage;
- Permit the Managed Risk Medical Insurance Board to increase employers' contributions to keep pace with rising health care costs (Sacramento Bee, 6/22);
- Require employees to accept and contribute to premium costs for a health plan offered by an employer;
- Require health plans to offer coverage to anyone who applies, with exception of people with serious illnesses who could get coverage through a state-administered, high-risk pool (Herdt, Ventura County Star, 6/22);
- Collect an assessment on health plans to fund the high-risk pool for people with serious illnesses (Sacramento Bee, 6/22);
- Mandate that health plans contracting with the state purchasing pool adopt strategies to control costs, such as standardized billing or disease management (Ventura County Star, 6/22);
- Require health plans to use 85% of premiums for health care costs; and
- Guarantee coverage to all children from low- and moderate-income households (Rau, Los Angeles Times, 6/22).
For Californians whose incomes do not exceed 300% of the federal poverty level, the bill would:
- Provide state subsidies on a sliding scale for health insurance premiums; and
- Cap contributions to the cost of health benefits at 5% of income (Ventura County Star, 6/22).
The compromise measure eliminates most exceptions to insurance requirements for small businesses (AP/Orange County Register, 6/22).
The Democrats' plan would launch the purchasing pool and employer mandate in 2010. The measure is projected to expand coverage to about 3.4 million Californians (Ventura County Star, 6/22).
The Núñez/Perata measure would not require all California residents to obtain health insurance, a cornerstone provision of Schwarzenegger's proposal (Sacramento Bee, 6/22).
In addition, the Democrats' funding plan would rely largely on contributions from employers. Schwarzenegger's plan would have required employers that do not provide health insurance to pay 4% -- almost half as much as Democrats' -- to a state fund and would draw additional funds from doctors and hospitals. Contributions from health care providers would be used to help fund an increase in Medi-Cal reimbursement rates.
Medi-Cal is California's Medicaid program (Ventura County Star, 6/22).
At an appearance in Sacramento, the governor reaffirmed his support for requiring individuals to purchase health insurance coverage, saying, "The only way that health care reform is going to work is if you have mandatory health care insurance" (Sacramento Bee, 6/22).
However, Schwarzenegger said he anticipates that he and legislators would reach a compromise, saying that "everyone wants to make this work" (Los Angeles Times, 6/22).
Republican legislative leaders, on the other hand, faulted the Democrats' proposal for not taking more aggressive action to control health care cost increases.
Senate Minority Leader Dick Ackerman (R-Irvine) said the Núñez/Perata proposal "jeopardizes jobs by applying expensive mandates on California businesses."
Assembly Minority Leader Mike Villines (R-Clovis) said, "Rather than place the entire burden on California small businesses, we should embrace common sense reforms like those introduced by Assembly Republicans that will allow for more choices" (Sacramento Bee, 6/22).
The National Federation of Independent Businesses was among the business groups that announced opposition to the measure, while the Coalition to Advance Healthcare Reform -- an alliance of insurers and employers that offer health care benefits to employees -- expressed reservations about the plan's funding mechanism and approach to controlling health care costs (Los Angeles Times, 6/22).
Video of the governor's appearance in Sacramento is available on his Web site.
The Bee reports that even some health care advocacy groups have begun to question whether health care reform plans offered by Democrats or the governor would withstand legal challenges.
The American Cancer Society, the American Lung Association and Pico California -- a coalition of faith-based and community groups -- on Thursday called for the Legislature to increase the state tobacco tax to fund proposed health care overhauls, rather than rely on contributions from employers that could be the target of legal action.
Perata dismissed the proposal (Sacramento Bee, 6/22).
Perata said the Senate would debate the measure on July 11 (AP/Orange County Register, 6/22).
A final bill is expected to emerge in September after Schwarzenegger, and Democratic and Republican lawmakers debate the plan over the summer (Shaw, Stockton Record, 6/21).
Citing concerns about the legality of the contributions Democrats and the governor propose using to fund health care reform, Dan Walters in his Bee column writes that the efforts could be targeted in court if they are approved.
Walters also notes a recent opinion from the California Legislature's legal office advising that the contributions be considered taxes rather than fees, as both Democratic legislative leaders and Schwarzenegger have characterized them. Fees have a lower threshold for legislative passage than taxes.
"Schwarzenegger and the Democrats are to be commended for seeking some solution to the health care conundrum, but they shouldn't be denying that there are serious, and perhaps fatal, legal pitfalls," Walters concludes (Walters, Sacramento Bee, 6/22).
KPCC's "Patt Morrison" on Thursday included a discussion with KPCC correspondent Julie Small about the compromise bill (Morrison, "Patt Morrison," KPCC, 6/21).
Audio of the segment is available online.
In addition, Capital Public Radio's "KXJZ News" on Friday reported on the compromise bill. The segment includes comments from Núñez (O'Mara, "KXJZ News," Capital Public Radio, 6/22).
A transcript and audio of the segment are available online.
"KXJZ News" also reported on the proposal to increase the state tobacco tax. The segment includes comments from Paul Knepprath of the American Lung Association and Perata (Russ, "KXJZ News," Capital Public Radio, 6/22).
A transcript and audio of the segment are available online.