Legislative Update

With the end of this legislative session approaching, Gov. Arnold Schwarzenegger (R) and legislative leaders have announced a compromise on a proposed prescription drug discount program that combines provisions of the failed ballot measures Proposition 78 and 79. Assembly Speaker Fabian Nuñez (D-Los Angeles) and Senate President Pro Tempore Don Perata (D-Oakland) are expected by the end of this week to amend their drug discount program bills -- AB 2911 and SB 1702, respectively -- to reflect the agreement. Under the compromise, discounts would be considered adequate if they were:

The lowest price offered to any state Medicaid program;
85% of the average manufacturer prices; or
Equal to the lowest price paid by any nonpublic entity in California.

However, drug companies -- which supported voluntary discounts proposed by Proposition 78 and have contributed more than $1.1 million to Schwarzenegger's campaigns -- might challenge the program in court if it is signed into law. Schwarzenegger expects the legislation to cross his desk within the next few days. Some political analysts say the compromise also could impact the gubernatorial race, as Schwarzenegger takes on issues that appeal to middle-class voters.

Schwarzenegger also has said he is looking to restore funding for Healthy Kids programs that was cut during budget negotiations, but no funding sources have been identified. The deleted provision would have provided $23 million to eliminate waiting lists for Healthy Kids programs in 18 counties. Republicans opposed the funding because it would have allowed undocumented immigrant children to receive health care benefits. Schwarzenegger has said all children in the state should have access to health care. Last month, he said the state needs private, public and not-for-profit organizations to work to enroll eligible children in government-sponsored health insurance programs. Meanwhile, Democratic gubernatorial candidate Phil Angelides has said if he is elected, he would roll back about $5 billion in corporate tax loopholes and tax breaks for residents whose annual incomes exceed $500,000 to fund children's health insurance and other programs.

In other legislative action, lawmakers are considering a bill that would require hospitals to provide uninsured patients with information about consumer rights and financial options to obtain services. Schwarzenegger vetoed similar legislation in 2004, saying the effectiveness of voluntary hospital guidelines should first be examined in addressing concerns about hospital billing practices.

The week's Legislative Update also includes action on:

A bill addressing Medi-Cal reimbursements to physicians;
Legislation requiring nursing homes to develop patients' rights policies; and
A measure that would create a state public health department.

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